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Duro Shox Pvt Limited

SAP Implementation
Project – ‘‘Pragati”

USER MANUAL
Materials Management
USER MANUAL

DOCUMENT CONTROL SHEET

GENERAL INFORMATION

Project name Document name Document location


Implementation Materials Management

DOCUMENT INFORMATION
Version Filename Date Author Reviewed Changes from
by previous version
Materials Management User Manual For Duro Shox Pvt Limited Version
1.0

V 1.0 EUT -MM

REFERENCE DOCUMENTS

Document Version R Reference

DOCUMENT APPROVALS

Kedar Kulkarni
MM Consultant
Prepared by Approved by
(KPIT Cummins Infosystems Limited.) (Duro Shox Pvt Limited)

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USER PROCEDURE MANUAL


TABLE OF CONTENTS
Duro Shox Pvt Limited________________________________________________1
1 Procurement of Stock Materials .............................................................................................................10
1.1 Procurement of Stock Materials – Raw Material Local / Return___________10
1.1.1 Purpose.....................................................................................................................................................10
1.1.2 Prerequisites .............................................................................................................................................10
1.1.3 Material Master Record..............................................................................................................................10
1.1.4 Vendor Master Record...............................................................................................................................24
1.1.5 Purchasing Info Record.............................................................................................................................35
1.1.6 Source List.................................................................................................................................................41
1.1.7 CIN Master Data........................................................................................................................................43
1.1.8 Excise Condition Record............................................................................................................................53
1.2 Request for Quotation (RFQ)_______________________________________56
1.2.1 Use............................................................................................................................................................56
1.2.2 Procedure..................................................................................................................................................56
1.2.3 Result.........................................................................................................................................................61
1.2.4 Example ....................................................................................................................................................61
1.3 Message output: RFQ_____________________________________________61
1.3.1 Use............................................................................................................................................................61
1.3.2 Procedure..................................................................................................................................................61
1.4 Maintaining Quotation ____________________________________________64
1.4.1 Use............................................................................................................................................................64
1.4.2 Procedure..................................................................................................................................................64
1.4.3 Result ........................................................................................................................................................66
1.4.4 Example ....................................................................................................................................................66
1.5 Price Comparison ________________________________________________67
1.5.1 Use............................................................................................................................................................67
1.5.2 Procedure..................................................................................................................................................67
1.5.3 Result ........................................................................................................................................................69
1.6 Creating Purchase Requisition _____________________________________69
1.6.1 Use............................................................................................................................................................69
1.6.2 Procedure..................................................................................................................................................69
1.6.3 Result ........................................................................................................................................................70
1.6.4 Example.....................................................................................................................................................70
1.7 Release Purchase Requisition______________________________________70
1.7.1 Procedure..................................................................................................................................................71
1.8. Assign and Process Purchase Requisition___________________________74
1.8.1 Use...........................................................................................................................................................74
1.8.2 Procedure..................................................................................................................................................74
1.8.3 Result ........................................................................................................................................................76
1.9 Purchase Order__________________________________________________77
1.9.1 Use............................................................................................................................................................77
1.9.2 Procedure..................................................................................................................................................77
1.9.3 Result ........................................................................................................................................................82
1.9.4 Example ....................................................................................................................................................82

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1.10. Release Purchase Order_________________________________________83


1.10.1. Procedure............................................................................................................................................83
1.11Message Output_________________________________________________87
1.11.1 Use.........................................................................................................................................................87
1.11.2 Procedure................................................................................................................................................87
1.12 Goods Receipt for Purchase Order_________________________________89
1.12.1 Use..........................................................................................................................................................89
1.12.2 Prerequisites ...........................................................................................................................................89
1.12.3 Procedure................................................................................................................................................89
1.12.4 Result ......................................................................................................................................................99
Material document 5000000009 posted...............................................................................................99
1.12.5 Example ..................................................................................................................................................99
1.13 Logistics Invoice Verification____________________________________100
1.13.1 Use........................................................................................................................................................100
1.13.2 Procedure..............................................................................................................................................100
1.13.3 Result ....................................................................................................................................................105
1.13.4 Example ................................................................................................................................................105
1.14 Returning Delivery _____________________________________________106
1.14.1 Use........................................................................................................................................................106
1.14.2 Procedure..............................................................................................................................................106
1.14.3 Result ....................................................................................................................................................113
Return Delivery document created..................................................................................................................113
1.14.4 Example ................................................................................................................................................113
1.15 Excise Invoice Other Movements__________________________________114
1.15.1 Procedure..............................................................................................................................................114
1.15.2 Result ....................................................................................................................................................116
1.15.3 Example ................................................................................................................................................116
1.16 Posting and Printing the Excise Invoice____________________________117
1.16.1 Use........................................................................................................................................................117
1.16.2 Prerequisites .........................................................................................................................................117
1.16.3 Procedure..............................................................................................................................................117
1.16.4 Result ....................................................................................................................................................120
1.17 Credit Memo___________________________________________________121
1.17.1 Use........................................................................................................................................................121
1.17.2 Prerequisites .........................................................................................................................................121
1.17.3 Procedure..............................................................................................................................................121
1.17.4 Result ....................................................................................................................................................127
1.17.5 Example ................................................................................................................................................127
1.18 Reversals / Cancellation of Invoice or Credit Memo __________________127
1.18.1 Use........................................................................................................................................................127
1.18.2 Prerequisites..........................................................................................................................................128
1.18.3 Procedure..............................................................................................................................................128
1.18.4 Result.....................................................................................................................................................133
1.18.5 Example.................................................................................................................................................133
1.19 Reversals / Cancellation of Goods Receipt (GR) _____________________134
1.19.1 Use........................................................................................................................................................134
1.19.2 Prerequisites..........................................................................................................................................134
1.19.3 Procedure..............................................................................................................................................134
1.19.4 Result ....................................................................................................................................................139

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1.19.5 Example ................................................................................................................................................139


1.20 Reversing CENVAT Postings _____________________________________140
1.20.1 Purpose.................................................................................................................................................140
1.20.2 Prerequisites .........................................................................................................................................140
1.20.3 Procedure..............................................................................................................................................140
1.20.4 Result.....................................................................................................................................................144
1.20.5 Example.................................................................................................................................................144
1.21 Canceling Excise Invoices _______________________________________145
1.21.1 Purpose.................................................................................................................................................145
1.21.2 Prerequisites .........................................................................................................................................145
1.21.3 Procedure..............................................................................................................................................145
1.21.4 Result.....................................................................................................................................................150
1.21.5 Example.................................................................................................................................................150
2 Procurement of Imported Materials – Business Process Procedure....................................................151
2.1 Procurement of Imported Materials________________________________151
2.1.1 Purpose..................................................................................................................................................151
2.1.2 Prerequisites ...........................................................................................................................................151
2.2 Creating Purchase Order ________________________________________152
2.2.1 Use.........................................................................................................................................................152
2.2.2 Prerequisites ...........................................................................................................................................152
2.2.3 Procedure................................................................................................................................................152
2.2.4 Result ......................................................................................................................................................158
2.2.5 Example ..................................................................................................................................................158
2.3 Release Purchase Order__________________________________________159
2.3.1 Procedure................................................................................................................................................159
2.4 Message Output_________________________________________________162
2.4.1 Use..........................................................................................................................................................162
2.4.2 Procedure................................................................................................................................................162
2.5 CAPTURING BILL OF ENTRY_____________________________________164
2.5.1 Use..........................................................................................................................................................164
2.5.2 Procedure................................................................................................................................................164
2.5.3 Result ......................................................................................................................................................171
2.5.4 Example ..................................................................................................................................................171
2.6 Goods Receipt for Imported Purchase Order_________________________172
2.6.1 Use..........................................................................................................................................................172
2.6.2 Procedure................................................................................................................................................172
2.6.3 Result ......................................................................................................................................................183
2.6.4 Example ..................................................................................................................................................183
2.7 Logistics Invoice Verification for the Materials_______________________184
2.7.1 Use..........................................................................................................................................................184
2.7.2 Procedure................................................................................................................................................184
2.7.3 Result ......................................................................................................................................................190
2.7.4 Example ..................................................................................................................................................190
3 Procurement of Subcontracting Materials – Business Process Procedure..........................................191
3.1 Procurement of Subcontracting Materials___________________________191
3.1.1 Purpose...................................................................................................................................................191
3.1.2 Prerequisites ...........................................................................................................................................191

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3.2 Creation of Subcontracting Purchase Order__________________________192


3.2.1 Use..........................................................................................................................................................192
3.2.2 Prerequisites ...........................................................................................................................................192
3.2.3 Procedure................................................................................................................................................192
3.2.4 Result ......................................................................................................................................................196
3.2.5 Example ..................................................................................................................................................196
3.3 Message Output_________________________________________________197
3.3.1 Use..........................................................................................................................................................197
3.3.2 Procedure................................................................................................................................................197
3.4 Transfer of Components to Subcontractor___________________________199
3.4.1 Use..........................................................................................................................................................199
3.4.2 Prerequisites ...........................................................................................................................................199
3.4.3 Procedure................................................................................................................................................199
3.4.4 Result ......................................................................................................................................................201
3.4.5 Example ..................................................................................................................................................202
3.5 Creation of Subcontracting Challan_________________________________202
3.5.1 Use..........................................................................................................................................................202
3.5.2 Prerequisites............................................................................................................................................202
3.5.3 Procedure................................................................................................................................................202
3.5.4 Result ......................................................................................................................................................204
3.5.5 Example ..................................................................................................................................................204
3.6 Printing of Subcontracting Challan________________________________205
3.6.1 Use.........................................................................................................................................................205
3.6.2 Procedure................................................................................................................................................205
3.7 Goods Receipt for Purchase Order _________________________________209
3.7.1 Use..........................................................................................................................................................209
3.7.2 Prerequisites ...........................................................................................................................................209
3.7.3 Procedure................................................................................................................................................209
3.7.4 Result ......................................................................................................................................................217
3.7.5 Example ..................................................................................................................................................217
3.8 Reconciling Subcontracting Challan________________________________218
3.8.1 Use..........................................................................................................................................................218
3.8.2 Procedure................................................................................................................................................218
3.8.3 Result ......................................................................................................................................................220
3.8.4 Example ..................................................................................................................................................220
3.9 Completing/Reversal/Re-credit Subcontracting Challan________________221
3.9.1 Use..........................................................................................................................................................221
3.9.2 Procedure................................................................................................................................................221
3.9.3 Result ......................................................................................................................................................222
3.9.4 Example ..................................................................................................................................................222
3.10 Logistics Invoice Verification for Subcontracting Material_____________222
3.10.1 Use........................................................................................................................................................222
3.10.2 Procedure..............................................................................................................................................222
3.10.3 Result ....................................................................................................................................................226
3.10.4 Example ................................................................................................................................................226
5. Procurement of External Services: Business Process Procedure.......................................................227
5.1 Procurement of External Services – Procurement Process_____________227
5.1.1 Purpose...................................................................................................................................................227
5.1.2 Prerequisites ...........................................................................................................................................227

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5.2 Creating Service Master__________________________________________228


5.2.1 Use..........................................................................................................................................................228
5.2.2 Procedure................................................................................................................................................228
5.2.3 Result ......................................................................................................................................................229
5.3 Creating Purchase Requisition ____________________________________230
5.3.1 Use..........................................................................................................................................................230
5.3.2 Procedure................................................................................................................................................230
5.3.3 Result ......................................................................................................................................................235
5.3.4 Example...................................................................................................................................................235
5.4 Assign and Process Purchase Requisition___________________________236
5.4.1 Use..........................................................................................................................................................236
5.4.2 Procedure................................................................................................................................................236
5.4.3 Result ......................................................................................................................................................239
5.6 Purchase Order_________________________________________________239
5.6.1 Use.........................................................................................................................................................239
5.6.2 Prerequisites ...........................................................................................................................................240
5.6.3 Procedure................................................................................................................................................240
5.6.4 Result ......................................................................................................................................................242
5.6.5 Example ..................................................................................................................................................243
5.7 For Releasing Purchase Order Refer User Manual of Stock Procurement_243
5.8 Message Output_________________________________________________243
5.8.1 Use..........................................................................................................................................................243
5.8.2 Procedure................................................................................................................................................243
5.9 Creation and Acceptance of Service Entry Sheet _____________________245
5.9.1 Use..........................................................................................................................................................245
5.9.2 Procedure................................................................................................................................................246
5.9.3 Result ......................................................................................................................................................256
5.9.4 Example ..................................................................................................................................................256
5.10 Logistics Invoice Verification_____________________________________257
5.10.1 Use........................................................................................................................................................257
5.10.2 Procedure..............................................................................................................................................257
5.10.3 Result ....................................................................................................................................................261
5.10.4 Example ................................................................................................................................................261
6 Asset Procurement – Business Process Procedure...............................................................................262
6.1 Purchase Order_________________________________________________262
6.1.1 Use..........................................................................................................................................................262
6.1.2 Procedure................................................................................................................................................262
6.1.3 Result.......................................................................................................................................................266
6.2 Release of Purchase Order _______________________________________266
6.2.1 Procedure................................................................................................................................................266
6.3 Goods Receipt for Purchase Order_________________________________267
6.3.2 Use..........................................................................................................................................................267
6.3.3 Prerequisites ...........................................................................................................................................267
6.3.4 Procedure................................................................................................................................................267
6.2.3 Result.......................................................................................................................................................269
6.4 Post Excise Invoice______________________________________________269
6.4.1 Procedure...............................................................................................................................................269

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6.4.2 Result......................................................................................................................................................271
6.5 Logistics Invoice Verification______________________________________272
6.5.1 Use..........................................................................................................................................................272
6.5.2 Procedure................................................................................................................................................272
6.5.3 Result.......................................................................................................................................................275
7 Excise Periodic Processing – Business Process Procedure..................................................................276
7.1 Excise Periodic Processing _______________________________________276
7.1.1 Purpose...................................................................................................................................................276
7.1.2 Prerequisites............................................................................................................................................276
7.2 Excise Report - CENVAT Register __________________________________277
7.2.1 Use..........................................................................................................................................................277
7.2.2 Prerequisites............................................................................................................................................277
7.2.3 Procedure................................................................................................................................................277
7.2.4 Result ......................................................................................................................................................279
7.3 Excise Register Updation....................................................................................................................280
7.3Updation of RG1 Register ________________________________________280
7.3.1 Use..........................................................................................................................................................280
7.3.2 Prerequisites............................................................................................................................................280
7.3.3 Procedure................................................................................................................................................280
7.3.4 Result ......................................................................................................................................................287
7.4 RG1 Register Extraction__________________________________________288
7.4.1 Use..........................................................................................................................................................288
7.4.2 Prerequisites............................................................................................................................................288
7.4.3 Procedure................................................................................................................................................288
7.4.4 Result ......................................................................................................................................................291
7.5 RG1 Register Print Utility_________________________________________292
7.5.1 Use..........................................................................................................................................................292
7.5.2 Prerequisites............................................................................................................................................292
7.5.3 Procedure................................................................................................................................................292
7.5.4 Result ......................................................................................................................................................295
8. PLA Register Extraction.......................................................................................................................295
8.1 PLA Register Extraction__________________________________________295
8.1.1 Use..........................................................................................................................................................295
8.1.2 Prerequisites............................................................................................................................................295
8.1.3 Procedure................................................................................................................................................295
8.1.4 Result ......................................................................................................................................................298
8.2 PLA Register Print Utility_________________________________________298
8.2.1 Use..........................................................................................................................................................298
8.2.2 Prerequisites............................................................................................................................................298
8.2.3 Procedure................................................................................................................................................298
8.2.4 Result ......................................................................................................................................................300
9. Reports .................................................................................................................................................301
7.1 Purchasing____________________________________________________301
7.1.1 Purchasing Documents per Vendor (ME2L)............................................................................................301
7.1.2 Purchasing Documents per Material (ME2M)..........................................................................................302
7.1.3 Source List for Material (ME0M)..............................................................................................................303
7.1.4 Purchase Info Record per Material (ME1M).............................................................................................303

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7.1.5 Purchasing Values(MC$G)......................................................................................................................305


9.2 Inventory_______________________________________________________307
9.2.1 Material Document List (MB51)...............................................................................................................307
9.2.2 Diplay Warehouse Stock (MB52).............................................................................................................309
9.3.3 Stock on Posting Date (MB5B)...............................................................................................................310
9.3.4 Stock Overview (MMBE).........................................................................................................................313
9.3.5 Stock in Transit (MB5T)..........................................................................................................................314
9.3.6 Slow Moving Items (MC46).....................................................................................................................314

Icons

Icon Meaning
Caution

Example

Note

Recommendation

Syntax

Abbreviations

R Required entry field


(used in the end-user procedures)

O Optional entry field


(used in the end-user procedures)

C Conditional field

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(used in the end-user procedures)

1 Procurement of Stock Materials

1.1 Procurement of Stock Materials – Raw Material Local / Return

1.1.1 Purpose
This process describes the procurement process of raw materials from indigenous source of supply with Country
Version India (CIN) relevant process like processing of Excise Duty (ED) and Sales Tax (ST) process.

1.1.2 Prerequisites
The following scenario specific master data must be created for operation of this building block.

1. Material Master Record


2. Vendor Master Record
3. Purchase Info Record (Optional)
4. Source List (Optional)
5. CIN Master Data
6. Excise Condition Record (if Tax applicable for the Vendor-Material Combination)

1.1.3 Material Master Record

Logistics  Materials Management  Material Master  Material  Create


Menu Path
(General)
MM01 – Create
T Code MM02 – Change
MM03 – Display

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Internal Number
assignment .
Enter the Industry Sector
Enter the Material Type

Press Enter to see the pop-up window.

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Select the required views and press Enter to input the organizational levels.

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Press Enter to input the details of the Material.

1.1.3.1 Basic Data Views

Enter the Material


Description
Enter the Unit of Measure
and material Group

Enter the division if Stock


Transfer will happen for this
material
Blocking for Procurement or
BOM enter here

Enter the Gross and Net


Weight for the Finished Goods

Enter here if the material is


returnable packing as VERP and
non returnable packing as LEIH

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Press Additional Data to


maintain Alternate Unit of
Measures

Enter any Basic Material is there

Press Additional Data to maintain the Alternate Unit of Measures (for e.g. 1000G= 20Nos for the Semi finished
goods)

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Press Main data to go to the next view

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1.1.3.2 Purchasing Views

Enter the Purchasing Group –


Person/Group responsible to
procure this material

If the Ordering Unit is other


than the Base UoM, enter the
Unit and make VAR. OUn as 1

Enter the Purchasing Value


Key as G1 (5% Delivery
Tolerance) or G2 (10%
Delivery Tolerance)
Select if QM is not active and
want to post to Inspection
Stock (Mainly used for
Spares)
Source list should be
maintained for this material
select the box.

Enter the No. of Days required


for GR Processing once the
material is arrived at factory.

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Enter the PO Text normally


specification is maintained

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1.1.3.3 MRP Views

Enter the appropriate MRP


Type)

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Work Scheduling View:

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1.1.3.4 Quality Management View

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1.1.3.5 Accounting Views

Enter the appropriate Valuation


Class (Various Valuation
Classes given below)
Enter the Price Control as V-Moving
Average and S-Standard

If Price Control is V enter the


Moving Average price, S enter
the Standard Price

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1.1.3.6 Costing Views

Enter Respective Profit


Centre of Plant/Depot

After entering all the details, press to save the Material.

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1.1.4 Vendor Master Record


Logistics  Materials Management  Purchasing  Master Data  Vendor 
Menu Path
Central
XK01 – Create
T Code XK02 – Change
XK03 – Display

Vendor Number to be put manually

Enter Company Code

Enter Purchasing Organisation


Enter Account Group (Various
Group given below)

Press Enter to input the details of the vendor.


Vendor Account Groups:
VDOM Domestic Vendors
VIMP Import Vendors
VSRV Service Vendors

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1.1.4.1 General Data

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Click on the CIN Details to enter the


Vendor Excise and Sales Tax details

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Enter all the details in the respective fields

Excise Indicator for Vendor as 1 –


100% Taxable

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Enter all the details in the respective fields

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Enter the detail in the respective field

Enter whether this vendor is approved or on Probation

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No need to enter in the below screen.

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1.1.4.2 Accounting Data

Enter the appropriate Reconciliation


Accounts (Various Accounts given below)

Reconciliation Accounts:

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Enter the appropriate Payment Terms and


Select the Chk double inv

Enter the appropriate Payment Methods


C – Cheque, E – Cash Payment, T – Bank Transfer

The below screen is explained in detail in FI User Manual:

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1.1.4.3 Purchasing Data

Enter the Order Currency, Terms of


Payment and Incoterms

Enter the appropriate Schema group, Vendor


(Various groups given below)

1. Select GR-based Inv. Verf if Invoice


verification is done after GR
2.. Select the Srv-based Inv. Verf if Invoice
Verification is done after Service Entry sheet.

Schema group, Vendor:

DM Domestic Schema
IM Import Schema

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Enter the Partner for the appropriate Partner


Functions

Press to save the Vendor master and the no is generated automatically.

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1.1.5 Purchasing Info Record

SAP Easy Access  Logistics  Materials Management  Purchasing  Master


Menu Path
Data  Info Record  Create
ME11 – Create
T Code ME12 – Change
ME13 - Display

You use this component if you wish to store information on a vendor and a material as master data at purchasing
organization or plant level. You can create purchasing info records for different procurement types (standard,
subcontracting, pipeline, consignment).

Enter the Info Category as


1. Standard – For normal Procurement (Domestic, Import, etc)
2. Sub-Contracting – For Sub-Contracting

Press enter the details in the Purchasing Info Record.

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If the message is displayed like this,


intimate the Quality Person to maintain
the QM Info Record (TCode: QI01)

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No need to enter anything in the below screen as it copies all the data from the Vendor Master.

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It is defaulted from the Material Master


but change for this Vendor-Material
combination if different.

Enter the Standard Quantity

Enter the appropriate Tax Code

It is defaulted from the Material Master


but change for this Vendor-Material
combination if different.

Enter the Net Price

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It is defaulted from the Material Master


but change for this Vendor-Material
combination if different.

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1.1.5.1 Result

Purchasing Info Record is created

1.1.5.2 Example

Purchasing Info Record 5300000384 is created.

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1.1.6 Source List


SAP Easy Access  Logistics  Materials Management  Purchasing  Master
Menu Path
Data  Source List  Maintain
ME01 – Maintain
T Code ME03 – Display
ME04 - Changes

Enter the Material No. and Plant

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Select if the Vendor is blocked for


Select if the Procurement for this particular
Vendor is fixed material alone

Enter 1 to be included
in MRP Run

Maintain the Validity Enter the Vendor and


Period till until which you Purchasing Organisation
will procure this material
from this vendor

Result: Source List changed.

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1.1.7 CIN Master Data

Menu Path J1ILN  SAP Menu  Indirect Taxes  Master Data  Excise Rate Maintenance

T Code J1ID

1.1.7.1 Chapter IDs

Select Chapter ID and Press

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Press New Entries to Create New Chapter ID

Press New Entries to go to the next screen.

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Enter the Chapter ID

Enter the Description as per


law

Press to save the data.

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1.1.7.2 Material ID and chapter ID combination

Select the Material and Chapter-Id Combination

Select Material and Chapter ID Combination and Press

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Press New Entries to Create New Material Number and Chapter ID


Combination

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Enter the Material No. and Chapter ID Combination

Enter the material type based on


the Material Nature

Press to save the data.

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1.1.7.3 Vendor Excise Details

Either you can maintain here or else in Vendor Master.

Select the Vendor Excise Details

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Press New Entries to Create Vendor Master Excise


Details

Press to save the data.

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1.1.7.4 Excise Indicator for Plants

Select the Excise Indicator for Plant

Select Excise Indicator for Plant and Press

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Press New Entries to Create Plant Excise


Details

Press to save the data.

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1.1.8 Excise Condition Record


1.1.8.1 Use

When you enter a purchasing document, for example, a purchase order, the R/3 System
automatically calculates the applicable excise duties using the condition technique.

1.1.8.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu No Menu path available for this transaction

Transaction code FV11

2. Enter the appropriate Condition type (various condition types given in next page) and maintain the
respective values.

Enter the appropriate condition type

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Various combinations to maintain the


condition record

For Raw Material / Packing Material maintain the Plant/Vendor/Material Combination.


For Service Tax /Assets maintain the Plant/Material Group Combination.
.

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Enter the Plant and Vendor

Enter the Material No. Enter the Value / amount

3. Press Ctrl+S or
4.
1.1.8.3 Result

Condition records saved.

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1.2 Request for Quotation (RFQ)

1.2.1 Use
Request for Quotation is used to float enquiries in market to obtain quotations from prospective vendors.
This transaction is optional for the process.

1.2.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Material Management Purchasing
RFQ/quotation Request for Quotation  Create
Transaction code ME41

2. RFQ can be created with reference to Purchase Requisition, Outline Agreement (Contract) and another
RFQ.

3. On the Create RFQ: Initial Screen, make the following entries:

1. Enter the RFQ type as “AN”


2. Enter the Quotation Deadline
3. Enter Purch. Organisation as 1101
4. Enter the respective Purchasing group

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Press this button to enter the Collective


No and Vendor Reference

Enter the Submission date

Enter the appropriate 1. Enter the Material No


Item category for Sub- 2. Enter the RFQ Quantity
Contracting & Service 3. Enter the Deliv. Date
4. Enter the Plant if it is Plant specific

4. Choose (header details icon) on the toolbar, then on screen Create RFQ: Header Data, enter
information in the fields as specified in the table below:

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Press this button to enter the vendor


code for which it has to be sent?

Enter the Collective No to have a track of


all RFQs related to particular instance

Enter the Your Reference if any


reference given by the vendor

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5. Choose (vendor address button) on the toolbar, then on screen Create RFQ: Vendor Address, enter
information in the fields as specified below:

After entering the vendor code and pressing enter the details of vendor will be displayed automatically.

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6. Press to Save the RFQ. This will refresh the Create RFQ: Vendor Address screen to allow creation of
the same RFQ data to a new vendor by following the steps outlined above.

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1.2.3 Result

RFQ created

Similarly create for other vendor in the same screen and various RFQ Nos will be generated

1.2.4 Example
RFQ created under the number 6000000000.

1.3 Message output: RFQ

1.3.1 Use
A RFQ needs to be printed for transmitting to vendor. This transaction is optional for the process.

1.3.2 Procedure

1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing 


RFQ/Quotation  Request for Quotation  Messages 
Print/Transmit
Transaction code ME9A

2. On the Message Output screen, make the following entries:

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Enter the RFQ Nos to be printed


and Execute (F8)

Press this button to Execute

Select the check box For Printout click


this button which For Print Preview For Direct Printout
will create Spool click this button click this button
Request.

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You will see out put as

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1.4 Maintaining Quotation

1.4.1 Use

This transaction is used to maintain the quotation, which is submitted by vendors. Vendor communicates
price for material and as a result the RFQ (Request for Quotation) needs to be updated.

This transaction is optional for the process.

1.4.2 Procedure

1. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Logistics  Materials Management  Purchasing 
RFQ/quotation  Quotation  Maintain
Transaction code ME47

2. On the Maintain Quotation: Initial Screen, make the following entries:

3. Choose the Enter key, or choose green Enter icon to proceed.


4. View the screen “Maintain Quotation: Header Data” by Choosing on the Header data icon in the toolbar.

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5. Enter information in the fields as specified in the table below. Some fields will not be available for input, as they
are reference fields only.

2. Press to enter the conditions

1. Press to select the line

6. Once all necessary header data has been maintained, the user can then enter the price information in one
of two fashions:

Enter the Conditions given by vendor.

a. Enter the price in the Net Price field on the Maintain Quotation: Item Overview screen by
Choosing overview icon on toolbar.

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b. To enter more detailed information in addition to the net price, select the line item and choose
the Item Details icon. Choose the green Back arrow to return to the ‘Overview’ screen once
data has been maintained.
i. A vendor’s quoted price can be entered in one of two ways.
ii. Enter the net price per unit in the Net price field. This price includes the vendor's
normal discounts and surcharges only. Cash discounts (for prompt payment) and taxes
are calculated separately.
iii. Enter the gross price in the Net price field, and maintain the conditions for the item.
Then the system automatically replaces the entered gross price with the calculated net
price. If the net price for an item is entered for which pricing conditions have been
maintained, the system always replaces the price entered with the calculated net price.
iv. Enter the Tax Code for any relevant taxes (for example, Excise Duty, Sales Taxes etc.)
in the Tax code field. If a purchase order is created by referencing an RFQ, this code
facilitates the determination of the tax amount when the invoice is entered in the
system.
v. After entering tax code, after choosing this system may give an information message
showing the effective price, Choose Enter to continue.

7. Once all quotation information has been successfully entered, save the data by Choosing on the Save
button, or Choose the <Ctrl + S> keys. A message will be displayed that the data has been saved.

1.4.3 Result

Quotation is maintained.

Maintain the same for other RFQs.

1.4.4 Example

Quotation for RFQ 6000000000 maintained.

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1.5 Price Comparison

1.5.1 Use

Required to compare prices from all quotations received as a result of a competitive bidding process.

This transaction is optional for the process.

1.5.2 Procedure

1. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Logistics  Materials Management  Purchasing 
RFQ/Quotation  Quotation  Price Comparison
Transaction code ME49

2. On the Price Comparison List screen, make the following entries:

Enter the Purchasing Organisation

Enter the Quotations to be compared or


the Collective RFQ

Parameters included for Comparison

a. Choose the comparison values to be used:


i. Reference quotation: You can compare the quotations within the list with a sample
quotation. The system displays the percentage deviation between each quotation in the list
and the sample quotation.
ii. Mean/minimum value quotation: The price comparison list can also display a "fictitious"
quotation reflecting the average or minimum value of all quotations. Select either the "Mean
value" or "Minimum value" quotation field to choose the type of fictitious quotation.
iii. Percentage basis: The price comparison list displays the percentage of each item in
relation to the maximum, minimum, or average price. To determine the display type, enter
one of the following:

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+: The highest value for each item is the 100% value


-: The lowest value for each item is the 100% value
_: The mean value for each item is the 100% value
b. Select the desired price computations:
i. Select the appropriate field to determine which of the following should be included in the
determination of the comparison price:
i. Include cash discounts
ii. Include delivery costs
iii. Determine effective price
3. Once all entries have been made, Choose the Execute.
4. On screen “Price Comparison List in Currency INR”, view the Price Comparison list.

Rank is Mean and


generated Effective Price is
automatically highlighted

5. To view any of the following information for a particular quote included in the comparison, Choose the RFQ
number with the mouse to select it, then Choose the appropriate icon/button on the menu toolbar:
6. Display Material: Allows the user to view the purchasing data in the material master record.
7. Display Vendor: Allows the user to view the vendor master record.
8. Additional Info: Allows the user to view payment terms, bid dates, currency information for all the vendor
quotations in the list.
9. If any information has been modified through the comparison list, save the RFQ before exiting. If changes
have been made and the user attempts to exit without saving, the system will return a message to verify
action.
10. To exit the transaction, choose the green Back arrow, the yellow Exit arrow, or Choose the F3 button.

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1.5.3 Result

Price Comparison List in Currency INR is displayed on the screen.

1.6 Creating Purchase Requisition


1.6.1 Use
A Purchase Requisition is created to indicate purchase department to procure materials or services with
details like how much quantity is required, when required. Generally it is created automatically for Raw
materials and Packing Materials through MRP Run and Spares and Service related to Plant
Maintenance Purchase Requisition is generated automatically from Plant maintenance Order.

This transaction is optional for the process.

1.6.2 Procedure

1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Requisition  Create
Transaction code ME51N

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2. On the Create Purchase Requisition screen, make the following entries:

Enter Material No. Enter required


Quantity

Enter the Desired Vendor if Vendor is known to


the person who is creating PR

Press or Ctrl+S to Save the Purchase Requisition.

1.6.3 Result

1.6.4 Example

Purchase requisition number 0010000000 created.

1.7 Release Purchase Requisition

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1.7.1 Procedure

1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Requisition  Release Individual Release
Transaction code ME51N

Click Other Purchase Requisition

Enter PR No.

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Click This Icon to Release PR

Click This Icon to Release

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Click This Icon to Save

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1.8. Assign and Process Purchase Requisition


1.8.1 Use

a) This section explains the functions provided by the SAP System for converting requisitions into
external purchasing documents (purchase orders, contract release orders, scheduling agreement
delivery schedules, RFQs), and the processing options thereby available to you:

• Assigning means defining the desired source for each purchase requisition item
o Further processing involves generating lists of requisitions that have been assigned or flagged as
outlined above, and the subsequent creation of RFQs, purchase orders, or lines of delivery
schedules under scheduling agreements.
1.8.2 Procedure
2. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Requisition  Follow-On Functions Assign and Process
Transaction code ME57

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3. The assignment of sources to and further processing of purchase requisitions are two distinct functions.
You can choose whether you wish to perform the functions in two separate steps or in just one.

4. Below are the Selection Parameters to restrict the process of PO from PR

1. Enter the appropriate


Purchasing Group
2. Enter the Scope of List as B1 for
PR generated through MRP Run
and A for remaining PR
3. Enter the appropriate Plant

1. Select the Assigned Purchase


Requisition (For Spares PR
normally the End User may have
entered the Vendor in the PR)
2. Select the appropriate Check
boxes for Processing the PR

5. Press or F8 to enter into the next screen.

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1. If Source List is
available click this button
After assigning the source
click on to this button to
process the PO or else save
for the assignment of source

1. Since only one source is assigned in


Source list system assigns the source
1. Select the check boxes automatically or else if more than one source
required PR which are to available a Pop-up window will be coming
be converted in to Pos. where one vendor has to be selected.

6. O is explained in next chapter.

1.8.3 Result

The source is assigned to PR and can be processed for PO.

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1.9 Purchase Order


1.9.1 Use
A purchase order is a legal document used to record an individual purchase with the vendor. It also
provides the vendor with a reference document to link to shipping (goods receipt) and invoicing (invoice
verification) processes. The purchase order is a commitment to a vendor for a given material, in a
specified quantity at a predetermined price and delivery date.

This transaction is mandatory for the process.

Please ensure that Purchase Order Value does not exceed specified value and if the purchase order value
crosses this limit a release procedure is applied on this purchase order. To release the Purchase Order go
to ME28 for collective release and ME29N for individual release.

1.9.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  CreateVendor/Supplying Plant Known
Transaction code ME21N

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2. If you want create purchase order with reference to the purchase requisition, on item details screen enter
the purchase requisition number and item number at Purch. Req. field. System will automatically adopt all
the data from requisition.

Click the
Purchasing
Requisitions
and Press
Adopt

Press this button to view


the Tax Calculation

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Press this button to view


the message

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Check the PO before


Saving

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1.9.3 Result

Purchase Order is created.

1.9.4 Example

Standard PO created under the number 210000000.

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1.10. Release Purchase Order

1.10.1. Procedure
Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Order Release Individual Release
Transaction code ME29N

Click Other Purchase Order

Enter PO No.

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Click This Icon to Release PR

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Click This Icon to Release

Click This Icon to Save

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1.11Message Output
1.11.1 Use

A Purchase Order needs to be printed for transmitting to vendor.

1.11.2 Procedure

2. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  Messages  Print/Transmit
Transaction code ME9F

3. On the Message Output screen, make the following entries

4. Choose to Execute.

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5. On screen Message Output select the appropriate Document number and perform the following:

Choose Output Message and/or


Choose Display Message and/or
Choose Message Detail and/or
Choose Trial Printout.

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1.12 Goods Receipt for Purchase Order


1.12.1 Use

Goods are received from the Vendor as a result of a Purchase Order at the receiving plant. A goods
movement is entered into the system referencing this PO and a goods receipt material document is
posted. Appropriate general ledger accounts are also posted and stocks are updated.

1.12.2 Prerequisites
Purchase Order

1.12.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

2. On the Goods Receipt Purchase Order screen, make the following entries:
Check for correct movement
type whenever doing goods
movement

Enter the Purchase Order No and Press Enter

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3. After pressing Enter system will fetch all the data from the Purchase Order as shown below:

Whichever material is in Blue those detail will be seen


in the Item detail

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4. System defaults the balance quantity in PO, change the quantity to the received quantity:

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Enter the Storage Location in which the


material to be placed.

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Enter the Delivery Note


details of the vendor

Select Item Ok and Press Enter and the Excise tab


will appear both in Header and Item Level

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Field name Description R/ O/ C User action and values Comment


Goods Goods Receipt R Select from drop down list
Receipt for action
Purchase Purchase Order R input the PO number which
Order generated above
4500000277
Movement 101
Type
Enter
Document Document Date R Enter document date
Date
Delivery Note in Header O Delivery Number from
Vendor
Vendor Vendor R Defaulted from purchase Grayed out
order
Posting Date Posting date R Enter posting date
Bill of lading Bill of lading O Enter bill of lading
Header text Header text O Enter header text

Close Header Detail data to enlarge the Detail data.


Select Material tab at Detailed Data.
Material Material tab R Defaulted from Purchase Grayed out
Order

Select Quantity tab in Detail data.


Qty in unit of Quantity in unit of R Enter the quantity you have Quantity
entry entry received from vendor. As a defaulted from
default system will give Purchase Order
purchase order quantity
Qty in Quantity in delivery O Enter the quantity as per
delivery note note vendor delivery challan

Select Where tab in Detail data.


Movement Movement type R Defaulted from header
type screen

Stock type Stock type R Defaulted from material


master or purchase order
Plant Plant R Defaulted from purchase
order
1000
Storage Storage location R Defaulted from purchase
location order if entered
1010
Goods Goods Recipient O Enter the name of person
Recipient who received goods

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Unloading Unloading point O


point
Text Text O Enter the text if required

Select Purchase Order tab in Detail data.


Purchase Purchase Order R Defaulted from header data Grayed out
Order
Del. Delivery completion O Defaulted by system if PO
completed indicator Qty = GR Qty
ind.

Select Partner tab in Detail data.


Vendor Vendor name O Grayed out

For this material batch management is not active. Just for reference purpose the following
data is given.

Select Batch tab in Detail data.

This tab will come only if material is managed in batches.

Proceed with the following steps if material is batch managed only.


Batch Batch number R Enter batch number as date
for batch managed
materials
Vendor batch Vendor batch O Enter vendor batch number
for reference

5. Select the Check box Item OK, after entering all the data.

You will get Excise Invoice tab at Header Data for capturing vendor excise invoice details and for posting Part I
and Part II.

6. On the Excise Invoice tab at Header Data make the following entries.

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Select Appropriate Excise settings


While posting in Case of dealer only

System defaults
the Excise Duty
(BED & ECS)
and in case

Field name Description R/O/C User action and values Comment


Capture & Capture & Post Excise R Choose Capture & Post Defaulted
Post Excise Invoice on Excise Excise Invoice from drop
invoice Action down list
Excise Group Excise Group R Defaulted by the system
Excise Excise invoice R Enter the vendor Excise
Invoice Invoice number
For example:
D013
Excise Inv. Excise Invoice Date R Enter the excise invoice
Date date of vendor
BED Basic Excise Duty R Defaulted from purchase Grayed out
order
AED Additional Excise Duty R Defaulted form purchase Grayed out
order
SED Special Excise Duty R Defaulted from purchase Grayed out
order
NCCD NCCD R Defaulted from purchase Grayed out
order
ECS Education Cess R Defaulted from purchase Grayed out

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order
MRP MRP Indicator O Tick the check box
Indicator Note: If the Base Price in
PO is the inclusive of
both the Material Cost
and Excise Value choose
the check box

Close Header Detail data to enlarge the Detail data.


Select Excise Item tab at Detailed Data (at the last).
Chapter ID Chapter ID of material R Defaulted by the system
No action required
EI Quantity Excise Invoice R Defaulted by the system
Quantity from Goods Receipt
quantity
Base Value Base value of material R Defaulted by the system
BED Basic Excise Duty R Defaulted by the system
AED Additional Excise Duty O Defaulted by the system
NCCD NCCD O Defaulted by the system
SED Special Excise Duty O Defaulted by the system
ECS Education Cess O Defaulted by the system

Please cross check the BED, AED, SED, NCCD and ECS amount of item as per the Vendor
Excise Invoice, legally you cannot avail more than what mentioned in Vendor Excise Invoice. All
other information is defaulted by the system. Hence, no action required by the user.

6. Choose Check at the top of screen.

7. Choose Post to post the document.

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Enter Excise Invoice No.


and Date vendor

Also See the account postings

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1.12.4 Result
Material document 5000000009 posted

1.12.5 Example
Material document 5000000009 posted

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1.13 Logistics Invoice Verification


1.13.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their
content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.

1.13.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

2. If you are opening for the first time this transaction, system will ask for Company Code, please give 1000 to
go in side the transaction.

3. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

Enter Invoice Date

Change Defaulted V0 Tax


code and tick Calculate tax
tab

Enter the PO No.

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If Part II entry is not done then system will not allow you to POST Invoice

Unless and until you post part2 system will not allow invoice verification

Enter the amount

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Field name Description R/ O/ C User action and values Comment


Transaction Invoice R Select Invoice from drop
down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
For Example
USERMANUAL
Posting date Posting Date R Enter the posting date of System will give
document current date as
default
Amount Invoice Amount R Enter invoice gross amount Amount
including taxes and duties mentioned is
299,960.20 only an example

Currency R Enter the currency in which


the bill is presented by
vendor, if not entered by
user system will default the
document currency from
purchase order
INR
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
V1
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out

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system
Discount Cash discount O Enter if cash discount is
offered by vendor

Hide Header data for getting full screen of items if required.


Purchase order / R Select Purchase order / Defaulted for
Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
Purchase order R Enter the first purchase
number order number generated
above
Goods / service items R Select Goods / Service Defaulted
items in indicator from drop
down list
Layout Layout of invoice R Select All information from
verification drop down list
Choose Enter

4. Choose Enter to complete the document feeding part.

5. To check the document credit and debit is balanced on the top right corner of your screen a traffic light is
displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or yellow color.

6. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth row
of your screen.

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Check Simulate Tab

7. Choose Save / Post, for posting the document.

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1.13.3 Result
Logistics Invoice verification document is posted.

1.13.4 Example
Document no. 5105600102 created

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1.14 Returning Delivery


1.14.1 Use
A material has been received and it needs to be returned for various reasons (i.e. poor quality,
incomplete, damaged). The user can use this transaction to return the material to the vendor via the
original GR document.

This transaction itself is an independent transaction and it is not mandatory in J81 process. This Return
Delivery transaction is used only when material is rejected and needs to be returned to vendor.

If material is rejected by using QM process there is no need to this transaction. This transaction can be
used only without QM process materials.

This transaction is used basically when purchased material is needs to be sent back to vendor because of
various reasons like poor quality, incomplete items, damaged etc.
b)

Bore proceeding with return delivery to vendor please ensure that sufficient stock is available in storage
location and if batch managed in particular batch stocks also. Other wise system will give error message.

Before doing Return Delivery to vendor, check if you have already done Invoice Verification to that Goods
Receipt. If you have already done invoice verification please raise Credit Memo to the extent of Returns
quantity and then proceed with this process. Other wise system will give an error message.
How to create Credit Memo transaction is explained in the chapter mentioned 1.17 below.

1.14.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

2. Select Return Delivery from drop down list to make Return Delivery to vendor.

3. On the Return Delivery Material Document screen, make the following entries:

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Enter the quantity to be returned to vendor

Enter the appropriate Reason for Movement

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Select Blocked Stock to


Return the rejected Material

Enter the appropriate Reason for Movement

Field name Description R/ O/ C User action and values Comment


Return Return Delivery R You have already selected
Delivery in above step 2
Material Material Document R Select from drop down list
Document number 5000000189
Enter the material
document number which
you have made at the time
of Goods Receipt for
purchase order
Enter
Document Document Date R Enter document date
Date
Delivery Note in Header O Delivery Number. Will be
defaulted if you have
already entered in original
document
Posting Date Posting date R Enter posting date

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Bill of lading Bill of lading O Enter bill of lading.


Header text Header text O Enter header text
Via Delivery Via Delivery R Tick the check box

Close Header Detail data to enlarge the Detail data.


Select Material tab at Detailed Data.
Material Material tab R Defaulted from Purchase Grayed out
Order

Select
Quantity tab
in Detail data.
Qty in unit of Quantity in unit of R Enter the quantity you want You can not
entry entry to return to vendor. As a return more than
default system will give what you have in
original Goods Receipt stock
quantity
5000
Qty in Quantity in delivery O Enter the quantity
delivery note note 100000

Select
Where tab in
Detail data.
Movement Movement type R Defaulted by the system
type with 122 movement

Stock type Stock type R Enter stock type from drop


down list
Plant Plant R Defaulted from original Grayed out
Goods Receipt
1000
Storage Storage location R Enter the store location
location from which you want to
return to vendor
Goods Goods Recipient O Enter the name of person
Recipient who received goods

Unloading Unloading point O


point
Reason for Reason for Movement R Select from the drop down
Movement list the reason for this
movement of material
0001
Text Text O Enter the text if required

Select Purchase Order tab in Detail data.


Purchase Purchase Order R Defaulted from header data Grayed out
Order

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Del. Delivery completion R Defaulted from purchase


completed indicator order
ind.

Select Partner tab in Detail data.


Vendor Vendor name O Grayed out

Select Batch tab in Detail data.

This tab will come only if material is managed in batches.

Proceed with the following steps if material is batch managed only.


Batch Batch number R Enter batch number if
externally maintained by
you or system will allocate
batch number
Vendor batch Vendor batch O Enter vendor batch number
for reference

Enter the Goods Issue Indicator as IPD

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Enter the Sub type as PR


for Vendor Returns

Field name Description R/ O/ C User action and values Comment


Select Select Create Excise R Choose Create Excise Select from drop
Create Invoice Invoice from drop down list down list
Excise
Invoice
Excise Group Excise Group R Defaulted by the system
Series Group Excise Series group R Defaulted by the system
Removal time Removal time of R System defaults current
goods time, change if required
BED Basic Excise Duty R Defaulted from purchase Grayed out
order
AED Additional Excise Duty R Defaulted form purchase Grayed out
order
SED Special Excise Duty R Defaulted from purchase Grayed out
order

Close Header Detail data to enlarge the Detail data.


Select Excise Item tab at Detailed Data (at the last).

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Chapter ID Chapter ID of material R Defaulted by the system


No action required
EI Quantity Excise Invoice R Defaulted by the system
Quantity from return delivery
document
2
Base Value Base value of material R Defaulted by the system
BED Basic Excise Duty R Defaulted by the system
Goods Issue Goods Issue Indicator R Select from drop down list
Indicator IPD for this process

Please cross check the BED, AED, SED, NCCD and ECS amount of item as per the Vendor
Excise Invoice, legally you cannot avail more than what mentioned in Vendor Excise Invoice. All
other information is defaulted by the system. Hence, no action required by the user.

4. Choose Check at the top of screen.

5. Choose Post to post the document.

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1.14.3 Result
Return Delivery document created
1.14.4 Example
Return Delivery Document No. 50000000011 created.

Note: Excise Invoice for Return delivery also will be generated in the back ground for this
transaction

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1.15 Excise Invoice Other Movements

1.15.1 Procedure
1. Access the activity choosing one of the following navigation options:
SAP CIN R/3 Indirect taxes  Sales / Outbound Movements  Excise Invoice
User menu  For Other Movements  Excise Invoice for Other Movements
Transaction Code J1IS

2. On the Excise Invoice Other Movements – Main Menu screen, make the following entries:

3. Choose Display Excise Invoice icon to start the transaction


Enter the Sub type as PR
for Vendor Returns

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Field name Description R/O/C User action and values Comment


Reference
Doc Number Document Number R Enter the return delivery
document number which
you have created in above
step
0000000126
Doc Year Document year R Enter the year of document
created
Example: 2006
Enter

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1.15.2 Result

Excise invoice generated is displayed.

1.15.3 Example

Excise invoice 0000000014 generated and displayed.

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1.16 Posting and Printing the Excise Invoice


1.16.1 Use

Excise Invoice has to be printed and sent along with the material. This is legal requirement in India.

1.16.2 Prerequisites
Excise Invoice Document is generated and posted.

1.16.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP CIN R/3 Indirect taxes  Sales / Outbound Movements  Excise Invoice
User menu  For Other Movements  Post and Print
Transaction code J1IV

2. On the SAP screen, make the following entries:


3. If the document is not posted in step mentioned above, Choose Release to Accounting to post Financial
Accounting document.

This transaction is used to just printing of excise invoice.


4. Follow the steps mentioned below for taking print of Excise Invoice.
Field name Description R/ O/ C User action and values Comment
Excise
internal
reference

Select internal excise invoice number from drop down list, you can find it with reference to the
Excise Invoice number generated in above step 1100400070 for example with the combination of
Excise Group 10 and vendor code 10006.
Document Document Number R Enter the Excise Invoice
No. Document Number
generated in above step
For example: 127
Document Document Year R Enter the document year
year 2006

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5. To take printout, select Goto from the top main menu and select Print Document from the list. Or Choose
Control + P to get the access of Excise Invoice Printing screen.

6. Choose Execute icon to get list of excise invoice ready to be printed.

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7. From the list select the excise invoice number by choosing the check box left side of number.

8. To take printout on printer Choose the Printer icon or Choose F8.

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9. To display excise invoice on screen Choose Display icon or Choose F9.

10. System will give popup asking for pre-printed invoice serial number, Enter pre-printed excise invoice
number. In this process Choose 99 for testing purpose (since it is not expected to have pre-printed invoice
for testing purpose).

11. Select printer from the drop down list. Check box for Print Immediately and New spool request.

12. Choose Print Preview or Print icons to display on screen or to print on printer mentioned above.

13. If printer is connected system will print the document on printer.

1.16.4 Result
Excise Invoice is printed.

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1.17 Credit Memo


1.17.1 Use

In this process of Logistics Invoice Verification a credit memo is generated on vendor. Please be
careful that during the total process after making logistics invoice verification you have made
return delivery to vendor. To recover that money you need to do this credit memo transaction.

1.17.2 Prerequisites

• Logistic Invoice Verification is already made

1.17.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

2. If you are opening for the first time this transaction, system will ask for Company Code, please give 1000 to
go in side the transaction.

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3. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

Select Credit Memo in


this tab

Put the Qty and Price to


be returned

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Field name Description R/ O/ C User action and values Comment

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Transaction Credit memo R Select Credit memo from


drop down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
Posting date Posting Date R Enter the posting date of System will give
document current date as
default
Amount Credit memo Amount R Enter invoice (credit memo)
gross amount including
taxes and duties
Currency R Enter the currency in which
the bill is presented by
vendor, if not entered by
user system will default the
document currency from
purchase order
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out
system
Discount Cash discount O Enter if cash discount is
offered by vendor

Hide Header data for getting full screen of items if required.

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Purchase order / R Select Purchase order / Defaulted for


Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
Purchase order R Enter the purchase order
number number
Goods / service items R Select Goods / Service Defaulted
items in indicator from drop
down list
Layout Layout of invoice R Select All information from
verification drop down list
Choose Enter

4. Choose Enter to complete the document feeding part.

5. To check the document credit and debit is balanced on the top right corner of your screen a traffic light is
displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or yellow color.

6. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth row
of your screen.

7. Choose Save posting the document.

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1.17.4 Result

Logistics Invoice verification document is posted.

1.17.5 Example

Document no. 5105600791 created

1.18 Reversals / Cancellation of Invoice or Credit Memo


1.18.1 Use

Invoice documents in Invoice Verification are either invoices or credit memos. These documents can be
cancelled. There are two different cases:

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• If an invoice is cancelled, the system automatically creates a credit memo.


• If a credit memo is cancelled, the system automatically creates an invoice.

The system takes the amount and quantity for the credit memo or invoice from the invoice or credit
memo to be cancelled, thus avoiding any differences between the invoice and the credit memo or the
credit memo and the invoice.

1.18.2 Prerequisites

An invoice document can only be cancelled if:

• it was posted in Logistics Invoice Verification


• It has not already been cancelled
• It is not a cancellation document for another document

When you cancel documents in Logistics Invoice Verification, the document line items are not
automatically cleared in Financial Accounting. We recommend that you periodically clear such
items (using daily background jobs, for example).

1.18.3 Procedure

1. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Further Processing  Cancel Invoice Document
Transaction code MR8M

2. The initial screen for reversal appears.

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3. In the fields Invoice doc. number and Fiscal year, enter the data for the invoice document you want to
cancel.
4. In the Reversal reason field, select the reason for cancelling the invoice. This allows you to differentiate
between different types of cancellations.

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Enter the reversal


reason

5. You can display the document to check. Choose Display document to do this. You can look at the items of
the document to be cancelled. Return to the initial screen by choosing Back.

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6. Choose Invoice document and reverse or Press Ctrl+S or .

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1.18.4 Result

Document Reversed and Clear FI Documents Manually.

1.18.5 Example

Document Reversed with no. 5105600114.

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1.19 Reversals / Cancellation of Goods Receipt (GR)


1.19.1 Use

When any data entered incorrect during GR posting it has to be reversed. To do the cancellation of GR,
all the follow on documents should be reversed.

1.19.2 Prerequisites

A GR can only be cancelled if:

• Invoice Verification posted if any should be reversed.


1.19.3 Procedure

1. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

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2. Choose Cancellation and enter the respective Material Document No. (GR No.)

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3. Press enter so that all the data will be captured automatically by the system. If any comment is there to
mention it can be mentioned in the Head Text and Text which is available at the Item level.

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4. Press Enter to continue and check all the details

5. Select the Check box Item OK, after entering all the data.

You will get Excise Invoice tab at Header Data and Item Details.

6. Choose Check at the top of screen.

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7. Press Ctrl+S or to post the document

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1.19.4 Result

Material document posted, please note the document number.

1.19.5 Example

Material document 5000000020 posted

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1.20 Reversing CENVAT Postings

1.20.1 Purpose

When the Material Document is cancelled the CENVAT Posting should also be reversed or cancelled.

1.20.2 Prerequisites
Material Document (GR) should be reversed.

1.20.3 Procedure

1. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Country India User Menu → Indirect Taxes → Procurement →
Excise Invoice → Incoming Excise Invoice → Central Processing
→ Capture / Change / Cancel / Display / Post
Transaction code J1IEX

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2. Select Post CENVAT.

3. Select Vendor Excise Invoice.

4. Enter the excise invoice number.

5. Press Enter to continue

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6. Choose Simulate CENVAT

7. A dialog box appears, showing which postings the system will make to reverse the CENVAT.

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8. Choose Post CENVAT.

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1.20.4 Result
CENVAT Posting Reversed.

1.20.5 Example
CENVAT Posting Reversed with document no. 0000000008.

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1.21 Canceling Excise Invoices

1.21.1 Purpose

When the Material Document is cancelled the CENVAT Posting should also be reversed or cancelled.

1.21.2 Prerequisites

• Material Document (GR) should be reversed.


• CENVAT Posting should be Reversed.

1.21.3 Procedure

1. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Country India User Menu → Indirect Taxes → Procurement →
Excise Invoice → Incoming Excise Invoice → Central Processing
→ Capture / Change / Cancel / Display / Post
Transaction code J1IEX

2. Select Cancel.

3. Select Vendor Excise Invoice.

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4. Enter the excise invoice number.

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5. Enter the Rejection Code.

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Enter the Rejection Code

6. Save the excise invoice.

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7. Press Yes to Cancel the Excise Invoice.

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1.21.4 Result
Excise Invoice has been successfully cancelled.

1.21.5 Example
Excise Invoice 0000000008 / 2008 ( 1234 ) has been successfully cancelled.

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2 Procurement of Imported Materials – Business Process Procedure


2.1 Procurement of Imported Materials
2.1.1 Purpose
This process Procurement of Imported Materials shows you how to handle the Countervailing duty
(CVD) on imports, which is levied in place of excise duty. Unlike other forms of customs duties, such as
basic customs duty or special customs duty, you can credit CVD paid on imports to your CENVAT
account.

2.1.2 Prerequisites

The following scenario specific master data must be created for operation of this building block and
subsequent dependent building blocks.

• Material Master record


(Refer User Manual – Procurement of Stock Materials (Domestic)

• Vendor Master record


Ensure that GR based IV is not selected in Purchasing Data.
(Refer User Manual – Procurement of Stock Materials (Domestic)

• CIN Master Data


(Refer User Manual – Procurement of Stock Materials (Domestic)

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2.2 Creating Purchase Order


2.2.1 Use
A purchase order is a legal document used to record an individual purchase with the vendor. It
also provides the vendor with a reference document to link to goods receipt and invoice
verification processes. The purchase order is a commitment to a vendor for a given material, in
a specified quantity at a predetermined price and delivery date.

2.2.2 Prerequisites

Before starting the process, please ensure the following information:

•Commissioner of Customs is created as domestic vendor, for example: vendor code


600000 - RBI Commissioner in this process.
•In master record of main imported vendor GR-based invoice verification tick should not be
there on Purchasing Data screen of vendor master. And Schema group, Vendor is filled
with schema group ZI. For example vendor code 200000 in this process.
•These are basic master data changes with respect to this process only.

For all purchase order a release procedure is applied.

2.2.3 Procedure
5. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  CreateVendor/Supplying Plant Known
Transaction code ME21N

6. On the Create Purchase Order screen, make the following entries:

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Put Doc Type as Import

Mention Tax code as V0


Don’t Put Tick in GR Based

7. For Basic Customs Duty(JCDB),CVD(JCV1),Addition Customs Duty(JADC),E-cess on CVD(JECV)


E-Cess (JEDB)

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Enter the Customs Duties in


respective Condition type fields

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Select Each Condition Type related to


Customs and click this Details Button

8. To change the vendor for condition type select JCDB condition type and Choose on Condition detail icon
located at left bottom side of your screen.

9. System will take to new Item – Conditions – Detail: screen. In this screen at right bottom of screen you can
find the vendor code 60000 the main imported vendor is defaulted here. You have to replace this vendor

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code with respective vendors and Choose enter and green arrow to come back (F3) to condition tab of
purchase order.

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Change DS200 to DS250(appropriate vendor)


for each condition types

10. Repeat the same for other condition types such as JCV1, JECV, JADC, and JEDB etc.

11. Purchase Order may be posted by Choosing on the Save icon.

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2.2.4 Result

A message will be displayed stating that the purchase order was saved, with the purchase order
number, please note the purchase order number.

2.2.5 Example
Standard PO created under the number 3100000000.

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2.3 Release Purchase Order


2.3.1 Procedure
1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Order Release Individual Release
Transaction code ME29N

Click Other Purchase Order

Enter PO No

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Click This Icon to Release PR

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Click This Icon to Release

Click This Icon to Save

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2.4 Message Output


2.4.1 Use

A Purchase Order needs to be printed for transmitting to vendor.

2.4.2 Procedure

8. Access the transaction choosing one of the following navigation options:


SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  Messages  Print/Transmit
Transaction code ME9F

9. On the Message Output screen, make the following entries

10. Choose to Execute.

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11. On screen Message Output select the appropriate Document number and perform the following:

Choose Output Message and/or


Choose Display Message and/or
Choose Message Detail and/or
Choose Trial Printout.

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2.5 CAPTURING BILL OF ENTRY


2.5.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their
content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.

2.5.2 Procedure
7. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

8. If you are opening for the first time this transaction, system will ask for Company Code, please give 1000 to
go in side the transaction.

9. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

Choose Planned Delivery Costs

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Enter the Amounts of the Customs Duties Manually in the Amount Column with referring to PO.

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Field name Description R/ O/ C User action and values Comment


Transaction Invoice R Select Invoice from drop
down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
For Example
USERMANUAL
Posting date Posting Date R Enter the posting date of System will give
document current date as
default
Amount Invoice Amount R Enter invoice gross amount Amount
including taxes and duties mentioned is
39.80 only an example

Currency R Enter the currency in which


the bill is presented by
vendor, if not entered by
user system will default the
document currency from
purchase order
USD
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
V0
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out

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system
Discount Cash discount O Enter if cash discount is
offered by vendor
Purchase order / R Select Purchase order / Defaulted for
Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
Purchase order R Enter the first purchase
number order number generated
above
Planned Delivery R Select Planned Delivery
Costs Costs in indicator from
drop down list
Layout Layout of invoice R Select All information from
verification drop down list
Choose Enter

10. Choose Enter to complete the document feeding part.

11. To check the document credit and debit is balanced on the top right corner of your screen a traffic light is
displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or yellow color.

12. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth row
of your screen.

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13. Choose Display Currency which will lead to small pop-up window having the company code currency and
Document Currency, position the cursor on the INR to convert to Document Currency and press the details
button.

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8. Choose Save / Post, for posting the document.

2.5.3 Result
Logistics Invoice verification document is posted.

2.5.4 Example
Document no. 5105600121created

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2.6 Goods Receipt for Imported Purchase Order


2.6.1 Use

Goods are received from the Vendor as a result of a Purchase Order at the receiving plant. A goods
movement is entered into the system referencing this PO and a goods receipt material document is
posted. Appropriate general ledger accounts are also posted and stocks are updated.

2.6.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

2. On the Goods Receipt Purchase Order screen, make the following entries:

Field name Description R/ O/ C User action and values Comment


Goods Goods Receipt R Select from drop down list
Receipt for action
Inbound Purchase Order R Enter the Purchase Order
Delivery No.generated above
3100000000
Movement 101
Type
Enter

Since this is imported purchase order and you have already done invoice verification for
planned delivery cost. System will give a new popup Excise Invoice item number screen (which
is not there in normal other process) asking for Commercial invoice number and year.
Please enter the invoice verification document number which you have done in above 5105600792
and year 2006.

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3. Choose Enter where a small pop-up window will prompt to enter the Commercial Invoice No. and Year (i.e.,
the Invoice Verification posted for Bill of Entry)

Enter the No generated for the posting of Bill of Entry

4. After pressing Enter system will fetch all the data from the Purchase Order as shown below:

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Whichever material is in Blue those detail will be seen


in the Item detail

5. System defaults the balance quantity in Purchase Order.

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Enter the storage


location

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Select Item Ok and Press Enter and the Excise tab


will appear both in Header and Item Level

Field name Description R/ O/ C User action and values Comment


Goods Goods Receipt R Select from drop down list
Receipt for action
Inbound Purchase Order R input the Purchase Order
Delivery number which generated
above
4500000059
Movement 101
Type
Enter
Document Document Date R Enter document date
Date
Delivery Note in Header O Delivery Number from
Vendor
Vendor Vendor R Defaulted from purchase Grayed out
order
Posting Date Posting date R Enter posting date
Bill of lading Bill of lading O Enter bill of lading

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Header text Header text O Enter header text

Close Header Detail data to enlarge the Detail data.


Select Material tab at Detailed Data.
Material Material tab R Defaulted from Inbound Grayed out
Delivery

Select Quantity tab in Detail data.


Qty in unit of Quantity in unit of R Enter the quantity you have Quantity
entry entry received from vendor. As a defaulted from
default system will give Purchase Order
purchase order quantity
Qty in Quantity in delivery O Enter the quantity as per
delivery note note vendor delivery challan

Select Where tab in Detail data.


Movement Movement type R Defaulted from header
type screen

Stock type Stock type R Defaulted from material


master or purchase order
Plant Plant R Defaulted from purchase
order
1000
Storage Storage location R Defaulted from Inbound
location delivery if entered
1010
Goods Goods Recipient O Enter the name of person
Recipient who received goods

Unloading Unloading point O


point
Text Text O Enter the text if required

Select Purchase Order tab in Detail data.


Purchase Purchase Order R Defaulted from header data Grayed out
Order
Del. Delivery completion O Defaulted by system if PO
completed indicator Qty = GR Qty
ind.

Select Partner tab in Detail data.


Vendor Vendor name O Grayed out

For this material batch management is not active. Just for reference purpose the following
data is given.

Select Batch tab in Detail data.

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This tab will come only if material is managed in batches.

Proceed with the following steps if material is batch managed only.


Batch Batch number R Enter batch number as date
for batch managed
materials
Vendor batch Vendor batch O Enter vendor batch number
for reference

7. Select the Check box Item OK, after entering all the data.

You will get Excise Invoice tab at Header Data for capturing vendor excise invoice details and for posting
Part I and Part II.

8. On the Excise Invoice tab at Header Data make the following entries.

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Field name Description R/O/C User action and values Comment


Capture & Capture & Post Excise R Choose Capture & Post Defaulted
Post Excise Invoice on Excise Excise Invoice from drop
invoice Action down list
Excise Group Excise Group R Defaulted by the system
Excise Excise invoice R Enter the vendor Excise
Invoice Invoice number
For example:
4500000059
Excise Inv. Excise Invoice Date R Enter the excise invoice
Date date of vendor
BED Basic Excise Duty R Defaulted from purchase Grayed out
order
AED Additional Excise Duty R Defaulted form purchase Grayed out
order
SED Special Excise Duty R Defaulted from purchase Grayed out
order
NCCD NCCD R Defaulted from purchase Grayed out
order
ECS Education Cess R Defaulted from purchase Grayed out
order

Close Header Detail data to enlarge the Detail data.


Select Excise Item tab at Detailed Data (at the last).
Chapter ID Chapter ID of material R Defaulted by the system
No action required
EI Quantity Excise Invoice R Defaulted by the system
Quantity from Goods Receipt
quantity
Base Value Base value of material R Defaulted by the system
BED Basic Excise Duty R Defaulted by the system
AED Additional Excise Duty O Defaulted by the system
NCCD NCCD O Defaulted by the system
SED Special Excise Duty O Defaulted by the system
ECS Education Cess O Defaulted by the system

Please cross check the BED, ECS (CVD in this case) amount of item as per the bill of lading,
legally you can not avail more than what mentioned in Vendor Excise Invoice.

In case of imported purchase order in normal case system will default CVD and ECess (invoice
verification made on commissioner of customs) amount as BED and ECS i.e. CENVAT amount.

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12. Choose Check at the top of screen.

13. Choose Post to post the document.

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2.6.3 Result
Material document posted.

2.6.4 Example
Material document 5000000021 posted

You can see account posting here

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2.7 Logistics Invoice Verification for the Materials


2.7.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their
content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.

2.7.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

2. If you are opening for the first time this transaction, system will ask for Company Code, please give 1000 to
go in side the transaction.

3. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

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Select Goods
/Service Items

Field name Description R/ O/ C User action and values Comment


Transaction Invoice R Select Invoice from drop
down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
For Example
1000
Posting date Posting Date R Enter the posting date of System will give
document current date as
default

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Amount Invoice Amount R Enter invoice gross amount Amount


including taxes and duties mentioned is
100 only an example

Currency R Enter the currency in which


the bill is presented by
vendor, if not entered by
user system will default the
document currency from
purchase order
USD
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
V0
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out
system
Discount Cash discount O Enter if cash discount is
offered by vendor

Hide Header data for getting full screen of items if required.


Purchase order / R Select Purchase order / Defaulted for
Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
Purchase order R Enter the first purchase
number order number generated
above
Goods / service items R Select Goods / Service Defaulted
items in indicator from drop
down list

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Layout Layout of invoice R Select All information from


verification drop down list
Choose Enter

4. Choose Enter to complete the document feeding part.

5. To check the document credit and debit is balanced on the top right corner of your screen a traffic light is
displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or yellow color.

6. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth row
of your screen.

Choose Display Currency to change in INR

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7. Choose Display Currency which will lead to small pop-up window having the company code currency and
Document Currency, position the cursor on the INR to convert to Document Currency and press the details
button.

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9. Choose Save / Post, for posting the document.

2.7.3 Result
Logistics Invoice verification document is posted.

2.7.4 Example
Document no. 5105600122 created

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3 Procurement of Subcontracting Materials – Business Process Procedure


3.1 Procurement of Subcontracting Materials
3.1.1 Purpose

In Indian subcontracting process when you issue materials to a subcontractor, you need to keep
track of what materials you have issued and when they have to be returned by subcontractor. The
reason for this close monitoring has to do with Indian tax law. Under excise law 57AC, when you
send materials to a subcontractor for processing, you are not required to pay any excise duty, even
though the materials have left your premises. However, if the materials have not been returned to
you within 180 days specified by the law, you will have to reverse any excise credit that you posted
when you have purchased the materials. When you send material out of your factory premises you
need to send with 57F4 Challan. In this process you are going to do the same.

3.1.2 Prerequisites

The following scenario specific master data must be created for operation of this building block and
subsequent dependent building blocks.

• Material Master record (Refer User Manual – Procurement of Stock Materials (Domestic))

• Vendor Master record (Refer User Manual – Procurement of Stock Materials (Domestic))

• Purchasing Info Record (Optional)

Ensure that Sub-Contracting as Info Category.


(Refer User Manual – Procurement of Stock Materials (Domestic))

• CIN Master Data (Refer User Manual – Procurement of Stock Materials (Domestic))

o Chapter IDs
o Material ID and chapter ID combination (Ensure Sub-Contract check box is selected for
the Materials that provided to vendor)
o CENVAT Determination
o Vendor Excise Details
o Excise Indicator for Plants
o Excise Indicator for Plant and Vendor
o Excise Tax Rates

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3.2 Creation of Subcontracting Purchase Order


3.2.1 Use

A purchase order is a legal document used to record an individual purchase with the vendor. It also
provides the vendor with a reference document to link to goods receipt and invoice verification
processes. The purchase order is a commitment to a vendor for a given subcontracting activity, in a
specified quantity at a predetermined price and delivery date.

3.2.2 Prerequisites

Components stock should be available for providing to subcontracting vendor.

3.2.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  CreateVendor/Supplying Plant Known
Transaction code ME21N

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2. On the Create Purchase Order screen, make the following entries:


Select ZSC Document Type for
Subcontracting Order

Enter L as Item Category for


Sub-Contracting Procurement

Click here to enter Bill of components


that are supplying to Subcontractor

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After filling the above data, choose on Material Data tab at item Details screen. There you will find a new icon
called Components, you have to choose on that icon to give the components list which you are likely to transfer
post to vendors and give the flowing inputs.

3. Click on the Components or Explode BOM and enter the materials that had to be sent:

4. Choose on Green Arrow or F3 to come back to main purchase order screen.

5. Ensure appropriate tax code have been entered for both the line items (V0 – Nil Tax for Sub-Contracting
Item)

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Ensure Taxcode V0 for Sub-Contracting Item and


click on the Taxes to view the tax calculation

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6. The Purchase Order may be posted by choosing on the Save icon.

3.2.4 Result

A message will be displayed stating that the purchase order was saved, with the purchase order
number.

3.2.5 Example

Standard PO created under the number 2400000000

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3.3 Message Output


3.3.1 Use

A Purchase Order needs to be printed for transmitting to vendor.

3.3.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  Messages  Print/Transmit
Transaction code ME9F

2. On the Message Output screen, make the following entries

3. Choose to Execute.

4. On screen Message Output select the appropriate Document number and perform the following:

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Choose Output Message and/or


Choose Display Message and/or
Choose Message Detail and/or
Choose Trial Printout.

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3.4 Transfer of Components to Subcontractor


3.4.1 Use

The Nature of subcontracting purchase order is that company will provide components to subcontractor.
This process describes how to transfer post materials to subcontractor.

3.4.2 Prerequisites

Sufficient stocks of components should be available for making transfer posting.

3.4.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Transfer posting
Transaction code MB1B

2. On the Enter Transfer Posting: Initial Screen, make the following entries:
Field name Description R/ O/ C User action and values Comment
Document Document Date R Input date
Date
Posting Date Posting Date R Input date
Movement Movement Type R 541
Type
Plant Plant R 1000
Storage Storage location R 1010
Location

Press To Purchase Order

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3. Choose on To Purchase Order icon on the top of the screen or choose F9 on key board. System will
give new popup screen asking for purchase order number. Give the 45000000## purchase order
number and choose enter to continue.

4. System will display components from purchase order with quantities


5. Choose only the Material that you are sending and enter the Storage Location from which it has to
be issued.

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6. Choose on Adopt + Details icon or F6.

7. Choose Enter if required the quantity of components can be changed.


8. Choose Save icon or Control + S to post the document.

3.4.4 Result

A message will be displayed stating that the document posted.

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3.4.5 Example

Material document 4900000039 posted.

3.5 Creation of Subcontracting Challan


3.5.1 Use

It is statutory requirement to send the components to subcontractor with 57F4 Challan.

3.5.2 Prerequisites

• Select the Sub-Contracting Material in Material and Chapter ID Combination of the Excise
Master (J1ID) for the sending Material.
• Ensure that the details of the receiving Material maintained in the Excise Master (J1ID).
• CENVAT Determination of the Excise Master (J1ID) Maintained for the both sending and
receiving Material.
• Ensure that the Assessable value for the sending material is maintained in the Excise Master
(J1ID)

3.5.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP User menu Indirect Taxes  Procurement  Subcontracting 
CIN Menu Subcontracting Challans  Create
Transaction code J1IF01

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2. On the Subcontracting Challan - Create, make the following entries:


Field name Description R/ O/ C User action and values Comment
Material Doc. Material document number R 4900000039
Mat. Doc. Year Material document year R 2006 Appropriate
Excise Group Excise Group R 10 Appropriate
Series Group Series Group R W3 Appropriate

3. Choose Enter to continue, system will take new Subcontracting Challan – Create screen, make the
following entries:

Field name Description R/ O/ C User action and values Comment


Select Posting tab
Posting date & time Posting date and R Input date and time of
time material removal
Print Immediately Print Immediately O Check this box if you want
challan printout immediately.
Select Overview Tab
Preprinted no Preprinted number O Enter pre-printed number if
you have

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4. Save challan by choosing on Save icon or Control + S.

3.5.4 Result

A message will be displayed stating that the document posted.

3.5.5 Example

Subcontracting Challan 000010001 2008; Series Group B1 successfully created.

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3.6 Printing of Subcontracting Challan


3.6.1 Use

It is statutory requirement to send the components to subcontractor with 57F4 Challan.

3.6.2 Procedure
Access the transaction choosing one of the following navigation options:
SAP User menu Indirect Taxes  Procurement  Subcontracting 
CIN Menu Subcontracting Challans  Change
Transaction code J1IF11

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Click the Print Immediately Tab

Press Save Icon

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Click the Print Immediately Tab

Press Enter

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Click the Icon to be the Print Preview of the Challan

Execute the Print to Get Print Out.

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3.7 Goods Receipt for Purchase Order


3.7.1 Use

Normally Goods are received from the Vendor as a result of a Purchase Order at the receiving plant

3.7.2 Prerequisites
Purchase Order

3.7.3 Procedure
9. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

10. On the Goods Receipt Purchase Order screen, make the following entries:

Enter the Purchase Order No and Press Enter

11. After pressing Enter system will fetch all the data from the Purchase Order as shown below:

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12. First do the posting for the Sub-Contracting Material.

Whichever material is in Blue those detail will be seen


in the Item detail

13. System defaults the balance quantity in PO, change the quantity to the received quantity if it is different from
defaulted quantity:

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14. Ensure that the Movement Type is 101.

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Select Item Ok
and

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Field name Description R/ O/ C User action and values Comment


Goods Goods Receipt R Select from drop down list
Receipt for action
Purchase Purchase Order R input the PO number which
Order generated above
4500000054
Movement 101
Type
Enter
Document Document Date R Enter document date
Date
Delivery Note in Header O Delivery Number from
Vendor
Vendor Vendor R Defaulted from purchase Grayed out
order
Posting Date Posting date R Enter posting date
Bill of lading Bill of lading O Enter bill of lading
Header text Header text O Enter header text

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Close Header Detail data to enlarge the Detail data.


Select Material tab at Detailed Data.
Material Material tab R Defaulted from Purchase Grayed out
Order

Select Quantity tab in Detail data.


Qty in unit of Quantity in unit of R Enter the quantity you have Quantity
entry entry received from vendor. As a defaulted from
default system will give Purchase Order
purchase order quantity
Qty in Quantity in delivery O Enter the quantity as per
delivery note note vendor delivery challan

Select Where tab in Detail data.


Movement Movement type R Defaulted from header
type screen

Stock type Stock type R Defaulted from material


master or purchase order
Plant Plant R Defaulted from purchase
order
1000
Goods Goods Recipient O Enter the name of person
Recipient who received goods

Unloading Unloading point O


point
Text Text O Enter the text if required

Select Purchase Order tab in Detail data.


Purchase Purchase Order R Defaulted from header data Grayed out
Order
Del. Delivery completion O Defaulted by system if PO
completed indicator Qty = GR Qty
ind.

Select Partner tab in Detail data.


Vendor Vendor name O Grayed out

For this material batch management is not active. Just for reference purpose the following
data is given.

Select Batch tab in Detail data.

This tab will come only if material is managed in batches.

Proceed with the following steps if material is batch managed only.

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Batch Batch number R Enter batch number as date


for batch managed
materials
Vendor batch Vendor batch O Enter vendor batch number
for reference

15. Select the Check box Item OK, after entering all the data.

NCCD NCCD O Defaulted by the system


SED Special Excise Duty O Defaulted by the system
ECS Education Cess O Defaulted by the system

Please cross check the BED, AED, SED, NCCD and ECS amount of item as per the Vendor
Excise Invoice, legally you cannot avail more than what mentioned in Vendor Excise Invoice. All
other information is defaulted by the system. Hence, no action required by the user.

5. Choose Check at the top of screen.

6. Choose Post to post the document.

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3.7.4 Result
Material document posted.

3.7.5 Example
Material document 5000000028 posted, You can see accounting Entries

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3.8 Reconciling Subcontracting Challan


3.8.1 Use

After making Goods Receipt the GR has to be reconciled with the challan sent to subcontractor.

3.8.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP User menu Indirect Taxes  Procurement  Subcontracting 
CIN Menu Subcontracting Challans  Reconcile Quantity
Transaction code J1IFQ

As we have refered challan During Goods receipt here we are getting following message, If you have not refred
challan during Gr following is the Process

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2. On the Quantity reconciliation for Subcontracting Challan screen, make the following entriees.

Field name Description R/ O/ C User action and Comment


values
Material Document Goods Receipt document R 5000000344
number
Mat. Doc. Year Year of document R 2006
Year Subcontacting challan year R 2006
Chalan No Subcontacting challan No R 000000031

Choose on Reconcile icon or F8 to go reconciliation screen.

3. System will take you to new Quantity reconciliation for Subcontracting Challans.

4. Here on this you can see system display items from Goods Receipt at top and items from challan at bottom
of screen.

5. Here you need to allocate the components consumed in GR stage are reconciled with challan to do this,
choose on Allocate based on FIFO icon in the middle of screen with calculator icon.

6. Or you can do allocation by entering manually also in respective line items at bottom, where Assigned
quantity filed is located in white color.

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7. After assignment save the document by choosing Save icon or choose Control + S

3.8.3 Result

Material document was successfully reconciled.

3.8.4 Example

Material Document 5000000028, 2008 was successfully reconciled.

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3.9 Completing/Reversal/Re-credit Subcontracting Challan


3.9.1 Use

This transaction is basically used to complete the challan if you have reconciled as stated above step.
There may be cases subcontractor may not able to supply within stipulated 180 days limit then in this
case also same transaction is used for reversal of challan or re-crediting the amount.

3.9.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP User menu Indirect Taxes  Procurement  Subcontracting 
CIN Menu Subcontracting Challans  Complete/Reverse/Recredit
Transaction code J1IF13

2. On the Subcontracting Challan – Complete/Reverse/Recredit screen, make the following entries:


Field name Description R/ O/ C User action and values Comment
Chalan No Subcontacting challan No R 0000000031
Excise year Document year R 2006
3. Choose enter to go to inside the challan document.

4. Select the radio button Complete Challan and.


5. Save the document by choosing Save icon or choose Control + S.

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3.9.3 Result

Subcontracting challan successfully completed.

3.9.4 Example

Subcontracting Challan 0000001 2008; Series Group B1 successfully completed.

3.10 Logistics Invoice Verification for Subcontracting Material


3.10.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their
content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.

3.10.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

2. If you are opening for the first time this transaction, system will ask for Company Code, please give 1000 to
go in side the transaction.

3. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

4. Choose only the Subcontracting material to post the document:

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Field name Description R/ O/ C User action and values Comment


Transaction Invoice R Select Invoice from drop
down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
For Example
USERMANUAL
Posting date Posting Date R Enter the posting date of System will give
document current date as
default
Amount Invoice Amount R Enter invoice gross amount Amount
including taxes and duties mentioned is
19.50 only an example

Currency R Enter the currency in which


the bill is presented by
vendor, if not entered by

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user system will default the


document currency from
purchase order
INR
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
V0
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out
system
Discount Cash discount O Enter if cash discount is
offered by vendor

Hide Header data for getting full screen of items if required.


Purchase order / R Select Purchase order / Defaulted for
Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
Purchase order R Enter the first purchase
number order number generated
above
Goods / service items R Select Goods / Service Defaulted
items in indicator from drop
down list
Layout Layout of invoice R Select All information from
verification drop down list
Choose Enter

5. Choose Enter to complete the document feeding part.

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6. To check the document credit and debit is balanced on the top right corner of your screen a traffic light is
displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or yellow color.

7. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth row
of your screen.

10. Choose Save / Post, for posting the document.

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3.10.3 Result
Logistics Invoice verification document is posted.

3.10.4 Example
Document no. 5105600132 created, Account postings are following

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5. Procurement of External Services: Business Process Procedure

5.1 Procurement of External Services – Procurement Process

5.1.1 Purpose
External Services Management is an application component within Materials Management Module. It
covers from creation of service master, bid invitation, order placements process, entering and
accepting services and finally invoice verification process.

5.1.2 Prerequisites
The following scenario specific master data must be created for operation of this building block and
subsequent dependent building blocks.

• Service Master record

o AMC Charges for Testing Machine

• Vendor Master record

Refer the document of “Procurement of Stock Materials”

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5.2 Creating Service Master


5.2.1 Use

The service master record counts as part of the master data within External Services Management
and serves as a source of data for you to draw upon when creating services. This enables you to
save time and reduces the frequency of errors, since you need only enter the complete service
descriptions in the service master record once.

5.2.2 Procedure
8. Access the transaction choosing one of the following navigation options:
SAP R/3 Menu Logistics  Materials Management  Service Master  Service
 Service Master
Transaction code AC03

9. On the Display Service screen, make the following entries:

10. Click on Create new service icon or press F5 (white paper icon) to create new service master.
11. Then you will get Create Service Master Record screen, make the following entries:

No Need to Enter as Internal No will be


generated and Enter the Short Text only

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Enter the Service Category and


Base Unit of Measure accordingly
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Field name Description R/ O/ C User action and values Comment


Service Service master record R You can see %_1 will be Leave blank
Number (internally assigned) displayed on this field,
leave it as blank. System
will assign internal service
number
Service description R Annual Mait. Contract for Input the value
Testing M/C.
Blocking of service procurement can be
Service Service Category R done Service:ALL
by entering appropriately
complete here Select from drop
Category down
Base unit of Base unit of R AU for Activity Unit
Measurement Measurement
Basic Data Conversion can be maintained here
Mat/srv.grp Material Group or R 91
Service Group
Division Division O
Valuation Valuation class R 3200
class
Long Text
This is free input O Annual Maintenance Contract
place. You can fully for Testing Machine.
input the service
specification.

12. Press enter to complete the entries.


13. Press Save icon or Control + S to save the entries.

5.2.3 Result

Service Master Record is created.

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5.3 Creating Purchase Requisition


5.3.1 Use
A Purchase Requisition is created to indicate purchase department to procure materials or services with
details like how much quantity is required, when required. Generally it is created automatically for Raw
materials and Packing Materials through MRP Run and Spares and Service related to Plant
Maintenance Purchase Requisition is generated automatically from Plant maintenance Order. In this
process Purchase Requisition is created against Quantity Contract created in above step 1.1.4 with
exact delivery / requirement date.

This transaction is optional for the process.

5.3.2 Procedure

1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Requisition  Create
Transaction code ME51N

3. On the Create Purchase Requisition screen, make the following entries:

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Enter the A/c Assignment Category Enter the Enter the appropriate
as K for Cost center and Item Short Text Material Group Plant and
Category D for Services Purchasing Group

When Item Category D is enterer one new


tab in the Item Detail Services is generated
to enter the Service No.

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Enter the Service No, Quantity and Gross


Price and press Enter

4. After pressing enter system shows a small pop-up window where respective G/L Account and Cost Center
to be entered.

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Enter the appropriate G/L


Account and Cost Center

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Enter the Desired Vendor if Vendor is known to


the person who is creating PR

5. Press or Ctrl+S to Save the Purchase Requisition.

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5.3.3 Result

Purchase Requisition is created,

5.3.4 Example

Purchase requisition number 0010000180 created.

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5.4 Assign and Process Purchase Requisition


5.4.1 Use
c) This section explains the functions provided by the SAP System for converting requisitions into
external purchasing documents (purchase orders, contract release orders, scheduling agreement
delivery schedules, RFQs), and the processing options thereby available to you:

• Assigning means defining the desired source for each purchase requisition item
o Further processing involves generating lists of requisitions that have been assigned or flagged as
outlined above, and the subsequent creation of RFQs, purchase orders, or lines of delivery
schedules under scheduling agreements.
5.4.2 Procedure
6. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase


Requisition  Follow-On Functions Assign and Process
Transaction code ME57

7. The assignment of sources to and further processing of purchase requisitions are two distinct functions.
You can choose whether you wish to perform the functions in two separate steps or in just one.

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8. Below are the Selection Parameters to restrict the process of PO from PR

1. Enter the appropriate


Purchasing Group
2. Enter the Scope of List as B1 for
PR generated through MRP Run
and A for remaining PR
3. Enter the appropriate Plant
4. Enter the Item category as D

1. Select the Assigned Purchase


Requisition (For Spares PR
normally the End User may have
entered the Vendor in the PR)
2. Select the appropriate Check
boxes for Processing the PR

9. Press or F8 to enter into the next screen.

1. If Source List is For Manual Assignment of


available click this button source click this Icon

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1. Select the check boxes


required PR which are to
be converted in to Pos.

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Click SAVE Icon.

Source has been assigned for this Requisition

5.4.3 Result

The source is assigned to PR and can be processed for PO.

5.5. For Releasing Purchase Requisition Refer User Manual for Stock Procurement

5.6 Purchase Order


5.6.1 Use
A purchase order is a legal document used to record an individual purchase with the vendor. It also
provides the vendor with a reference document to link to shipping (goods receipt) and invoicing (invoice
verification) processes. The purchase order is a commitment to a vendor for a given material, in a
specified quantity at a predetermined price and delivery date.

This transaction is mandatory for the process.

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Please ensure that Purchase Order Value does not exceed specified value and if the purchase order value
crosses this limit a release procedure is applied on this purchase order. To release the Purchase Order go
to ME28 for collective release and ME29N for individual release.

5.6.2 Prerequisites

1. Before creating purchase order if this vendor is subject to Tax Deduction at Source (TDS) or with
holding tax please ensures that necessary entries in vendor master is updated.

5.6.3 Procedure
6. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  CreateVendor/Supplying Plant Known
Transaction code ME21N

7. If you want create purchase order with reference to the purchase requisition, on item details screen enter
the purchase requisition number and item number at Purch. Req. field. System will automatically adopt all
the data from requisition.

Click the
Purchasing
Requisitions
and Press
Adopt

Press this button to view


Select this check box if Invoice the Tax Calculation
Verification is done after
Service Entry Sheet

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Condition Record for JSVD and JEC4 should be Maintained in FV11 with Material Group/Plant
Combination.

Select
Invoice
tab
Tax code Enter Tax code R S1 Select S1 tax
code

Since the procurement services covered with service tax of 10% (for example only, check for
legal requirement), it is advised to select V1 tax code.
Jurisdiction Jurisdiction code R Will be defaulted from plant

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code parameters

Depending on for which plant you are procuring the services system will select Jurisdiction
code. In system the following Jurisdiction codes were configured IN00 – Central
GR-based IV Goods Receipt based O Tick this check box
invoice verification
Srv.-based IV Service based invoice O Tick this check box If Invoice
verification Verification will
be done after the
Service Entry
sheet

8. The Purchase Order may be posted by Choosing on the Save button or Choose Control + S for saving.

5.6.4 Result

Purchase Order is created.

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5.6.5 Example

Standard PO created under the number 4500000062.

5.7 For Releasing Purchase Order Refer User Manual of Stock Procurement

5.8 Message Output


5.8.1 Use

A Purchase Order needs to be printed for transmitting to vendor.

5.8.2 Procedure

14. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  Messages  Print/Transmit
Transaction code ME9F

15. On the Message Output screen, make the following entries

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16. Choose to Execute.

17. On screen Message Output select the appropriate Document number and perform the following:

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Choose Output Message and/or


Choose Display Message and/or
Choose Message Detail and/or
Choose Trial Printout.

5.9 Creation and Acceptance of Service Entry Sheet


5.9.1 Use

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The services actually performed (work actually done) by a service vendor are recorded in a Service
Entry Sheet with reference to the purchase order.

5.9.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 Menu Logistics  Materials Management  Service Entry Sheet 
Maintain
Transaction code ML81N

2. On the Service Entry Sheet screen, make the following entries:

3. Click on Other Purch. Orders icon or Shift + F5, system will popup new screen.

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4. In this screen against Purchase Order field give the purchase order number which is created in above steps
and press enter to continue.

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5. You will get new Service Entry Against Purchase Order


6. Here on this screen click Create Entry Sheet (white paper icon) or Shift + F1 to get new entry sheet.
7. System allocates service entry sheet number internally and you will get the number on screen.

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Press Service Selection and a


dialog box appears

8. System will give a popup screen with purchase order number on that, press enter to continue.

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9. Select the line item 10 and click on Services or F9 (Adopt services) icon on top of screen.

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10. For example the following screen name will come:

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11. You can observe the system copied the service line item from purchase order with open item quantity i.e. 1
AU.

12. Change the quantity as per your requirement

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13. With this the basic information of service entry sheet is fully completed. As per the requirement you can fill
other fields also if required.
14. To accept the service click on Accept icon or Control + F1 (Green flag icon).

Press Green Colour Flag Button

15. You can see the traffic light is become Yellow color. That means it is ready to save the service entry sheet.

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The colour changes from red to


yellow and Press Save

16. Press or Ctrl+S to save the document.

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5.9.3 Result

A message indicates that the service entry sheet saved, acceptance document posted.

5.9.4 Example

Service entry sheet saved, acceptance document 5000000134 posted.

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5.10 Logistics Invoice Verification


5.10.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their
content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.

5.10.2 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

2. If you are opening for the first time this transaction, system will ask for Company Code, please give 1000 to
go in side the transaction.

3. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

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Field name Description R/ O/ C User action and values Comment


Transaction Invoice R Select Invoice from drop
down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
For Example
USERMANUAL
Posting date Posting Date R Enter the posting date of System will give
document current date as
default
Amount Invoice Amount R Enter invoice gross amount Amount

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including taxes and duties mentioned is


1122.40 only an example

Currency R Enter the currency in which


the bill is presented by
vendor, if not entered by
user system will default the
document currency from
purchase order
INR
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
S1
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out
system
Discount Cash discount O Enter if cash discount is
offered by vendor

Hide Header data for getting full screen of items if required.


Purchase order / R Select Purchase order / Defaulted for
Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
Purchase order R Enter the first purchase
number order number generated
above
Goods / service items R Select Goods / Service Defaulted
items in indicator from drop
down list
Layout Layout of invoice R Select All information from

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verification drop down list


Choose Enter

4. Choose Enter to complete the document feeding part.

5. To check the document credit and debit is balanced on the top right corner of your screen a traffic light is
displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or yellow color.

6. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth row
of your screen.

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11. Choose Save / Post, for posting the document.

5.10.3 Result
Logistics Invoice verification document is posted.

5.10.4 Example
Document no. 5105600795 created

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6 Asset Procurement – Business Process Procedure.


6.1 Purchase Order
6.1.1 Use
A purchase order is a legal document used to record an individual purchase with the vendor. It also
provides the vendor with a reference document to link to shipping (goods receipt) and invoicing (invoice
verification) processes. The purchase order is a commitment to a vendor for a given material, in a
specified quantity at a predetermined price and delivery date.

This transaction is mandatory for the process.

Prerequisites

1. Before creating purchase order if this vendor is subject to Tax Deduction at Source (TDS) or with holding tax
please ensures that necessary entries in vendor master is updated.
2. Asset Management Module Active.

6.1.2 Procedure
7. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  CreateVendor/Supplying Plant Known
Transaction code ME21N

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Enter Account Enter PO Qty,Net


Assignment ‘A’ Price,Currency,
and Short text of Material Group
the Assest

Enter Code V1

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1. Enter the respective Asset No.

Enter the Asset


No.

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3. Click Taxes Tab to View the Tax Details

IIN FV11 maintain Condition record for respective Tax Conditions with Material Group/Plant combination.

3.Click Save Button to Save the PO.

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6.1.3 Result
Purchase Order Created with No. 230000000.

6.2 Release of Purchase Order


6.2.1 Procedure
For Release of Purchase order Please refer Stock Procurement Manual.

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6.3 Goods Receipt for Purchase Order


6.3.2 Use

Goods are received from the Vendor as a result of a Purchase Order at the receiving plant. A goods
movement is entered into the system referencing this PO and a goods receipt material document is
posted. Appropriate general ledger accounts are also posted and stocks are updated.

6.3.3 Prerequisites
Purchase Order

6.3.4 Procedure
16. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

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Select Only Capture


Excise Invoice

Save the Document.

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6.2.3 Result
Material Document 500000029 Posted.

6.4 Post Excise Invoice


6.4.1 Procedure
Access the transaction choosing one of the following navigation options:
SAP R/3 menu CIN Easy Screen(J1ILN)  Indirect Taxes  Procurement
Incoming Invoice  Central Processing ->Post Excise Invoice
Transaction code J1IEX

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Click Simulate Cenvat.

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Click Post Cenvat.

Click Continue

6.4.2 Result
Excise Invoice Posted.

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6.5 Logistics Invoice Verification


6.5.1 Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their
content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and Financial
Accounting.

6.5.2 Procedure
4. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

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Click Simulate

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Click Save.

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6.5.3 Result
Invoice Document 5105600133 Posted.

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7 Excise Periodic Processing – Business Process Procedure


7.1 Excise Periodic Processing
7.1.1 Purpose

Excise Periodic Processing’s that are to be carried out at end of a period. Excise Periodic Processing
helps you prepare and carry out the activities required for day-end or month-end and year-end
closing.

• TR6 Challan Posting with PLA Register Updation


• Utilization of CENVAT
• RG1 Register updation
• Proforma for Monthly Return under Rule 7 of the Cenvat Credit Rules, 2001

7.1.2 Prerequisites

Before execute business scenarios, you need to post the business processes transactions from other
scenarios.

As part of the integrated scenario, this scenario needs several User Manuals as prerequisites to
demonstrate these include:

• Production Planning and Discrete Manufacturing


• Procurement of Stock Materials
• Sales and Distribution

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7.2 Excise Report - CENVAT Register


7.2.1 Use

Details to submit an Annexure to the Excise Authorities as a Monthly Return Under Rule 57AE of the
Central Excise Rules, 2001. CENVAT Register displays input credit details for Raw materials or
Capital Goods. This report can be generated detailed as Annexure or summary as Abstract.

7.2.2 Prerequisites

User must be assigned the Indian Localization menu.

7.2.3 Procedure
9. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Country India User Menu → Indirect Taxes → Registers →
Excise Tax → CENVAT Register
Transaction code J2I9

10. On the Proforma for Monthly Return Under Rule 57AE of the Central Excise Rule screen, make the
following entries:

Select the Radio Button for Capital Goods / Inputs to


display Annexure / Abstract

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Field name Description R/ O/ C User action and values Comment


Company Company code R 1000
Code
Excise Group Excise Group for R 10
which ID for which
CENVAT Register is
being generated
Posting Date Posting date range R The date from
the beginning of
the month to end
of the month
Annexure Output to be C Select this radio button if At time you can
generated Annexure the out put is being generate an
or Abstract generated for Annexure Annexure or
Abstract
Abstract Output to be C Select this radio button if At time you can
generated Annexure the out put is being generate an
or Abstract generated for Abstract Annexure or
Abstract
Inputs Annexure to be C Select this radio button if At time you can
generated for Input the out put Annexure is generate an
materials or Capital being generated for Input Annexure for
Goods Materials Input materials
or Capital Goods
Capital Annexure to be C Select this radio button if At time you can
Goods generated for Input the out put Annexure is generate an
materials or Capital being generated for Capital Annexure for
Goods Goods Input materials
or Capital Goods

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11. The out put can be saved into a local file or printed by using the print options.

7.2.4 Result

You are able to generate Proforma for Monthly Return Under Rule 57AE of the Central Excise Rule.

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7.3 Excise Register Updation


7.3Updation of RG1 Register
7.3.1 Use

RG1 register maintained at Manufacturing Plants for excisable finished goods. The register shows
goods movements from the factory to a store and stores to customer, specifically for excisable
finished goods. The R/3 System generates all the necessary entries in the register.

This report only creates register entries for goods movements that have not already been entered. It
does not create duplicate entries.

Using this activity, you can also update the goods issue into RG23A Part I and RG23C Part I, Register by
select the radio button option in the Registers.

7.3.2 Prerequisites

To extract the data to RG1 Register, Material numbers has to be maintained in the table J_2IRG1BAL
- Opening/Closing balance table for RG1.

7.3.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Country India User Menu → Indirect Taxes → Registers →
Excise Tax → Update RG23A/C Issues and RG1
Transaction code J1I5

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2. On the Update of Registers RG1 and RG23(Part1) screen, make the following entries:

Select appropriate Classification

Select the Radio Button for RG1 / RG23A Part 1 / RG23C


Part 1 Updation

Field name Description R/ O/ C User action and Comment

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values
Company Company Code R 1000
Code
Plant Plant – for which RG1 R 1000
Register is being
maintained
Excise Group Excise Group for R 10
which RG1 register is
being maintained
Material Material document O Based on the updation
Document number criteria enter values
Number
Document Material document O Material document year
Year year
Posting Date Date of Material R Enter the Material
document Posted Document
Posting Date
Movement Movement Type used O
Type for posting the
materials
Storage Storage location used O
Location for posting the material
movements
Material Material number to O
update the RG1
Register
Document Document date of the O
Date material document
Batch Batch number of the O
materials
Stock Type Stock Type declared O
Rule Excise Classification O
Rule
Classification Pre-defined R IIM Receipts
Classifications For updating of RMA- Receipt from
goods receipts manufacture
from ROP-Receipt from
Manufacturing outside under any other
plant use RMA provision
Issues
For updating of IDH-Removal from
Goods issue, factory on payment of
i.e. Removal duty for Home use
from factory on IDE-Removal on
payment of duty payment of duty for
for home use –

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IDH export under no bond


IWE-Removal without
payment of duty for
export under bond
IWT-Removal without
payment of duty for
transfers
IWO-Removal without
payment of duty for
other purpose
RG23/ RG1 RG23 / RG1 updation R Select the Date to be considered by
date appropriate radio the system for updation of
button to update RG1 Register
the RG1 Document Entry date
Register. Please
Document posting date
select the
document entry System date
date radio button
Registers Register to update R Select the By using this Transaction
RG23A radio you can update the
button to update following Registers
the RG1 RG23A Part1
Register,
RG23C Pat1
RG1

Please press enter and ignore any messages.

Update the Receipts to RG1 Register and then update the issue to RG1 Registers. Follow the sequence of
transactions.

You can update the RG1 Register by selecting material document header values or Material document line
item level details or both together.

The following Classification codes need to be used while updating the Excise Registers:
Register Type Goods issues Goods receipts
RG 23A IIM ROP
IPD
IWD
RG23C IIM ROP
IPD
IWD
RG1 IDH RMA
IDE ROP

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IWE
IWT
IWO

3. System will display the ‘Update of Registers RG1 and RG23 (Part1’) screen:
Displays all the line items to meet the selection criteria to update the RG1 Register.

Select Check Boxes for which Updation to be

4. Select the line items which needs to be updated to RG1 Register by selecting the check box at the
beginning of the each line item

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Press Simulate

5. Simulate the selection by using the Simulate function or use Shift+F10 to simulate the selection

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6. System will display the selection Green or Red Traffic lights. The line items which can be updated will be
displayed with Green Traffic Lights and the line items which can not be updated will be displayed with Red
Traffic Lights.

7. After selecting the right documents select the line item and use the Create button to update the RG1
Register or use CTRL+Shit+F11 to make register entry.

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Processing over for 3 records

7.3.4 Result

Processing over for <number of records selected> records

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7.4 RG1 Register Extraction


7.4.1 Use

This step needs to be performed in order to create the RG1 details into the respective tables.

7.4.2 Prerequisites

You have to complete the update of RG1 Register before performing this step.

7.4.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Country India User Menu → Indirect Taxes → Registers →
Excise Tax → Extract
Transaction code J2I5

2. On the Excise Registers Extraction screen, make the following entries:

Choose Execute

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Field name Description R/ O/ C User action and values Comment


Excise Group Excise group for which R 10
RG1 Register being
generated
State Date Starting date of R Starting date of data to be
Extraction extracted for RG1 registers
End Date Ending date of R Ending date of data to be
Extraction extracted for RG1 registers
Selection Mass extraction of R Select the radio button User can
Registers data to all registers Select Any Register option generate all the
registers
together or
individual
register wise
Select Selection of individual R Activate the RG1 Check
individual register box to extract the RG1
Registers Register
Display Last Displays the O
Extracted previously upto what
dates date the register has
been extracted for
information

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3. Click on execute icon or Press F8 or Program  Execute

Press Yes which appears in the Dialog

4. If the RG1 Register is being generated for the Period First Time, system will execute the report and
display the pop-screen with Register name and Green Tick mark, if it is successfully extracted,
otherwise it will show the Red Cross.

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7.4.4 Result
RG1 data has been extracted

Using this activity, you can also extract the following Excise Registers in addition to RG1.
• RG23A Part I
• RG23A Part II
• RG23C Part I
• RG23C Part II
• PLA

In the Registers select option, if you select All registers, the system will create an extract for all registers. If you only
want to create an extract for specific registers, select Select any register and then the registers that you want to
extract.

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7.5 RG1 Register Print Utility


7.5.1 Use

The objective of this process is to print the RG1 Register or to display on the screen.

7.5.2 Prerequisites

The data must be extracted to the RG1 Register for the period to which RG1 Register need to be
printed.

7.5.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Country India User Menu → Indirect Taxes → Registers →
Excise Tax → Print Utility program
Transaction code J2I6

2. On the Print Excise Registers screen, select the RG1 Radio button to print the RG1 Register.

Choose

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3. Click on Execute icon or Press F8 or Program  Execute


4. On the Print RG1 Register screen, make the following entries:

Choose

Field name Description R/ O/ C User action and values Comment


Excise Group Excise group for which R 10 Enter the Excise
RG1 Register is being Group
generated
Start Date Starting date of the R For example Starting Date
period for which 01.09.2005
currently RG1Register
is being generated
End Date Ending date of the R For example: Ending Date
period for which 29.09.2005
currently RG1Register
is being generated

5. Click on Execute icon or Press F8 or Program  Execute

6. System will display the Print parameters maintenance screen assign the out put device name and select the
Print Preview option. System will display the output on the screen.

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7. See the output on the screen and based on the requirement print the output using Ctrl + P option or through
menu Text  Print.

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7.5.4 Result
RG1 Register ready to print or you can see on the screen.

Using this activity, you can also view or print the following Excise Registers in addition to RG1
• RG23A Part I
• RG23A Part II
• RG23C Part I
• RG23C Part II
• PLA
You have to print or see the registers one after another.

8. PLA Register Extraction


8.1 PLA Register Extraction
8.1.1 Use

This step needs to be performed in order to extract the data relating to PLA Register to respective
tables.

8.1.2 Prerequisites

The following process has been executed, if any transactions took place during the period of PLA
register extraction for payment of CENVAT and Sale of goods

• TR6 Challan Updation


• Utilization of CENVAT

8.1.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Country India User Menu → Indirect Taxes → Registers →
Excise Tax → Extract
Transaction code J2I5

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2. On the Excise Registers Extraction screen, make the following entries:

Choose

Field name Description R/ O/ C User action and values Comment


Excise Group Excise group for R 10
which PLA Register
being generated
State Date Starting date of R Starting date of data to be
Extraction extracted for PLA registers
End Date Ending date of R Ending date of data to be
Extraction extracted for PLA registers
Selection Mass extraction of R Select the radio button Select User can
Registers data to all registers Any Register option generate all the
registers
together or
individual
register wise
Select Selection of R Activate the PLA Check box to
individual individual register extract the PLA Register
Registers
Display Last Displays the O System will

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Extracted previously upto display the last


dates what date the extraction date
register has been on the screen
extracted for
information

3. Click on execute icon or Press F8 or Program  Execute

4. If the PLA Register is being extract for the Period First Time, system will execute the report and display the
pop-screen with Register name and Green Tick mark, if it is successfully extracted, otherwise it will show
the Red Cross.

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8.1.4 Result

PLA data has been extracted

8.2 PLA Register Print Utility


8.2.1 Use

The objective of this process is to print the PLA Register or to display on the screen.

8.2.2 Prerequisites

The data must be extracted to the PLA Register for the period to which PLA Register need to be
printed.

8.2.3 Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Country India User Menu → Indirect Taxes → Registers →
Excise Tax → Print Utility program
Transaction code J2I6

2. On the Print Excise Registers screen, select the PLA Radio button to print the PLA Register.

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Choose

3. Click on Execute icon or Press F8 or Program  Execute

4. On the Print PLA Register screen, make the following entries:

Choose

Field name Description R/ O/ C User action and values Comment


Excise Group Excise group for which R 10 Enter the Excise
PLA Register is being Group
generated
Start Date Starting date of the R For example Starting Date
period for which 01.09.2005
currently PLA Register
is being generated
End Date Ending date of the R For example Ending Date
period for which 30.09.2005
currently PLA Register
is being generated
5. Click on Execute icon or Press F8 or Program  Execute

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6. System will display the Print parameters maintenance screen assign the out put device name and select the
Print Preview option. System will display the output on the screen.

7. See the output on the screen and based on the requirement print the output using Ctrl + P option or through
menu Text  Print.

8.2.4 Result

PLA register displayed on screen or printed.

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9. Reports
7.1 Purchasing
7.1.1 Purchasing Documents per Vendor (ME2L)

Chose Execute Icon

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7.1.2 Purchasing Documents per Material (ME2M)

Choose Execute

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7.1.3 Source List for Material (ME0M)

7.1.4 Purchase Info Record per Material (ME1M)

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7.1.5 Purchasing Values(MC$G)

Choose Execute

Click Switch Drill Down Icon

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9.2 Inventory
9.2.1 Material Document List (MB51)

Choose Execute

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Click this Icon to have


Detail View.

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9.2.2 Diplay Warehouse Stock (MB52)

Choose Appropriate
Input for your selection.

Choose Execute or Press F8.

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9.3.3 Stock on Posting Date (MB5B)

Select Apropriate Entries


For your selection

Choose Execute or Press F8

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9.3.4 Stock Overview (MMBE)

Choose Execute or Press F8

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9.3.5 Stock in Transit (MB5T)

Choose Execute or Press F8.

This means no stock in transit

9.3.6 Slow Moving Items (MC46)

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Select Appropriate Input


Entries

Choose Execute and Press F8.

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